Choppington residential property held on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Godiva Mortgages | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Choppington 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 conveyancer we work with provide it.
Mason was the the leasehold owner of a conversion flat in Choppington on the market with a lease of fraction over 61 years unexpired. Mason informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Mason to invoke his statutory right. Mason obtained expert advice and secured an acceptable resolution without going to tribunal and sell the flat.
Last Christmas we were e-mailed by Dr Joshua Edwards , who acquired a purpose-built apartment in Choppington in March 2005. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar properties in Choppington with an extended lease were worth £208,600. The mid-range amount of ground rent was £60 invoiced per annum. The lease terminated on 27 October 2083. Having 57 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including costs.
Last Winter we were contacted by Mr and Mrs. E Davis , who was assigned a lease of a first floor flat in Choppington in June 2011. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Similar homes in Choppington with 100 year plus lease were in the region of £200,000. The average ground rent payable was £50 billed per annum. The lease terminated on 22 January 2103. Taking into account 77 years left we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus costs.