Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Carbis Bay. Clearly, the term of lease remaining reduces over time. This may pass by relatively unnoticed when the flat or house needs to be sold or refinanced. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Eligible leaseholders in Carbis Bay have the right to extend the lease for a further ninety years in accordance with statute. Please give careful consideration before delaying your Carbis Bay lease extension. Holding off the cost now likely increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Yorkshire Building Society | 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. |
The lawyers that we work with undertake Carbis Bay 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 conveyancing solicitor we work with provide it.
Off the back of protracted discussions with the freeholder of her ground floor flat in Carbis Bay, Bethany initiated the lease extension process just as her lease was coming close to the critical 80-year deadline. The legal work was concluded in September 2010. The landlord’s fees were kept to an absolute minimum.
Last year we were called by Mr G Dupont , who took over the lease of a basement flat in Carbis Bay in March 2005. We are asked if we could estimate the premium could be for a 90 year lease extension. Identical residencies in Carbis Bay with 100 year plus lease were worth £270,000. The average ground rent payable was £55 invoiced annually. The lease ended in 2100. Considering the 74 years left we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.
Mr Harry Gómez purchased a ground floor apartment in Carbis Bay in October 2008. We are asked if we could approximate the price could be for a ninety year lease extension. Identical flats in Carbis Bay with 100 year plus lease were in the region of £166,400. The mid-range amount of ground rent was £60 collected every twelve months. The lease terminated on 19 March 2080. Taking into account 54 years unexpired we estimated the premium to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of professional charges.