For those whose Carnforth flat is held on a long lease, the message is clear – if nothing is done, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension.
Leasehold premises in Carnforth with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Regardless of whether you are a tenant or a freeholder in Carnforth,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Carnforth valuers.
Last Autumn James, started to get near to the eighty-year threshold with the lease on his purpose- built flat in Carnforth. Having purchased his flat 18 years previously, the lease term was of little concern. Luckily, he noticed he would imminently be paying an inflated amount for a lease extension. James arranged for a lease extension just in the nick of time in April. James and the landlord who owned the flat above subsequently settled on sum of £6,000 . If he had missed the deadline, the amount would have escalated by a minimum £1,050.
Last Summer we were e-mailed by Mr and Mrs. Y Harris , who moved into a recently refurbished flat in Carnforth in October 2000. We are asked if we could estimate the premium could be to extend the lease by an additional years. Similar properties in Carnforth with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £45 collected per annum. The lease terminated on 16 May 2096. Having 71 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including legals.
Last Autumn we were called by Dr T Ramírez , who owned a garden flat in Carnforth in July 2007. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparative premises in Carnforth with an extended lease were valued about £225,800. The mid-range ground rent payable was £60 billed annually. The lease ended on 11 January 2085. Taking into account 60 years left we approximated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 not including professional charges.