For anyone whose Buckley property is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
Leasehold premises in Buckley with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Retaining our service will provide you increased control over the value of your Buckley leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Dexter, started to get near to the eighty-year mark with the lease on his first floor flat in Buckley. Having purchased his flat twenty years ago, the length of the lease was of no significance. Fortunately, it dawned on him that he needed to take action soon on a lease extension. Dexter arranged for a lease extension at the eleventh hour last May. Dexter and the landlord who owned the flat above eventually settled on an amount of £5,500 . If the lease had slid to less than eighty years, the amount would have escalated by at least £1,025.
Last Winter we were called by Mr R Green , who acquired a recently refurbished flat in Buckley in April 2006. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Identical homes in Buckley with 100 year plus lease were valued about £233,200. The average ground rent payable was £60 billed every twelve months. The lease elapsed on 10 April 2087. Given that there were 61 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £22,800 and £26,400 not including expenses.
In 2010 we were phoned by Ms V Khan who, having acquired a one bedroom flat in Buckley in February 2007. The question was if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Comparative residencies in Buckley with a long lease were in the region of £171,800. The mid-range ground rent payable was £55 invoiced per annum. The lease concluded on 2 January 2076. Considering the 50 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 not including professional charges.