Clifton leases on residential properties are gradually losing value. if your lease has in the region of ninety years remaining, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for the lease extension to be in place before the term of the current lease falls below 80 years - otherwise a higher amount will be payable. Flat owners in Clifton will usually qualify for a lease extension; however It would be wise to check with a conveyancing solicitor to check if you qualify. In certain cases you may not qualify. There are prescribed deadlines and formalities to comply with once the process is triggered so it’s sensible to be guided by a conveyancer during the process.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Clifton leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Eli, came dangerously near to the 80-year mark with the lease on his ground floor apartment in Clifton. Having bought his property two decades ago, the unexpired term was of little concern. As luck would have it, he recognised he would soon be paying an inflated amount for Extending the lease. Eli arranged for a lease extension at the eleventh hour in April. Eli and the landlord in the end settled on sum of £6,000 . If he failed to meet the deadline, the sum would have become more costly by at least £1,075.
Last Spring we were e-mailed by Dr H Bell , who bought a first floor apartment in Clifton in May 1998. The question was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable homes in Clifton with an extended lease were in the region of £246,800. The mid-range ground rent payable was £60 collected per annum. The lease elapsed on 7 February 2076. Considering the 50 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £44,700 and £51,600 exclusive of legals.
In 2010 we were contacted by Mrs N Mason who, having acquired a studio apartment in Clifton in November 2007. We are asked if we could estimate the premium could be to extend the lease by ninety years. Similar homes in Clifton with a long lease were worth £208,200. The mid-range ground rent payable was £65 invoiced yearly. The lease lapsed on 23 March 2087. Given that there were 61 years unexpired we calculated the premium to the landlord for the lease extension to be between £19,000 and £22,000 plus fees.