Clent leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Clent residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Clent you would be well advised to see if your lease has between 70 and ninety years left. There are good reasons why a Clent flat owner with a lease having around eighty years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold properties in Clent with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
| 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. |
Retaining our service gives you enhanced control over the value of your Clent leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Henry owned a 2 bedroom apartment in Clent on the market with a lease of a few days over sixty years remaining. Henry on an informal basis contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Henry to invoke his statutory right. Henry obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the property.
Last year we were contacted by Mrs Niamh Morel , who completed a basement flat in Clent in March 1995. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Comparable premises in Clent with an extended lease were in the region of £198,800. The mid-range ground rent payable was £55 invoiced monthly. The lease termination date was in 2081. Given that there were 55 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £33,300 and £38,400 exclusive of professional charges.
Dr P Norbert took over the lease of a basement flat in Clent in March 2002. The dilemma was if we could estimate the price would likely be to prolong the lease by 90 years. Identical flats in Clent with an extended lease were in the region of £295,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease concluded in 2101. Having 75 years outstanding we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus expenses.