For anyone whose Cleveleys home is held on a long lease, the message is clear – if no remedial action is taken, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The lawyers that we work with handle Cleveleys 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.
Kian was the the leasehold proprietor of a 2 bedroom apartment in Cleveleys on the market with a lease of a little over 59 years remaining. Kian informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Kian to exercise his statutory right. Kian obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
Last year we were called by Mr and Mrs. V Smith , who moved into a studio apartment in Cleveleys in August 1999. The dilemma was if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Identical premises in Cleveleys with a long lease were worth £285,000. The average ground rent payable was £55 billed monthly. The lease finished in 2105. Given that there were 80 years remaining we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including costs.
Last month we were called by Ms Amy Smith , who was assigned a lease of a garden apartment in Cleveleys in March 2007. We are asked if we could approximate the price would be to prolong the lease by 90 years. Similar properties in Cleveleys with an extended lease were valued around £200,800. The average ground rent payable was £65 invoiced monthly. The lease terminated on 17 August 2085. Considering the 60 years left we calculated the compensation to the landlord for the lease extension to be between £20,900 and £24,200 not including legals.