It’s a harsh certainty that a Clent residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Clent property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than 80 years - otherwise a higher amount will be due. Most flat owners in Clent will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold residencies in Clent with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Engaging our service will provide you better control over the value of your Clent leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
David owned a studio flat in Clent on the market with a lease of a few days over 59 years unexpired. David on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were David to invoke his statutory right. David obtained expert legal guidance and was able to make a more informed decision and deal with the matter and readily saleable.
In 2010 we were approached by Dr I Dupont who, having moved into a studio apartment in Clent in April 2011. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by an additional years. Comparable premises in Clent with 100 year plus lease were valued about £225,800. The average amount of ground rent was £60 billed every twelve months. The lease end date was on 26 February 2086. Having 60 years left we calculated the premium to the landlord for the lease extension to be within £25,700 and £29,600 not including expenses.
In 2013 we were contacted by Mr and Mrs. O Gómez who, having purchased a studio flat in Clent in January 1996. The question was if we could approximate the price would be for a 90 year extension to my lease. Identical premises in Clent with 100 year plus lease were valued about £210,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease came to a finish in 2106. Having 80 years unexpired we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.