Chances are that where you own a flat in Cannock you actually own a long leasehold interest over your property
Leasehold properties in Cannock with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with undertake Cannock lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Last Spring Tommy, started to get close to the 80-year mark with the lease on his one bedroom apartment in Cannock. In buying his flat two decades ago, the lease term was of minimal relevance. As luck would have it, he became aware that he would imminently be paying an inflated amount for a lease extension. Tommy arranged for a lease extension at the eleventh hour in June. Tommy and the landlord eventually settled on sum of £6,000 . If the lease had dropped lower than 80 years, the premium would have increased by a minimum £900.
In 2013 we were contacted by Mr M Hill who, having owned a purpose-built apartment in Cannock in September 1996. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable premises in Cannock with 100 year plus lease were valued about £240,600. The average amount of ground rent was £60 billed yearly. The lease terminated on 8 February 2088. Taking into account 62 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 exclusive of costs.
Last year we were phoned by Dr Milo Murphy , who completed a purpose-built flat in Cannock in September 1998. The question was if we could estimate the price would likely be to extend the lease by an additional years. Comparable residencies in Cannock with an extended lease were valued about £174,200. The mid-range ground rent payable was £55 invoiced yearly. The lease lapsed in 2077. Given that there were 51 years remaining we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 not including fees.