Colchester leases on residential properties are gradually losing value. if your lease has about ninety years remaining, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for the lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher premium will be payable. Leasehold owners in Colchester will usually be legally entitled to a lease extension; however a solicitor will confirm your eligibility. In certain cases you may not be entitled. There are also strict timetables and steps to comply with once the process is initiated so it’s sensible to be guided by a lawyer during the process.
Leasehold premises in Colchester with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Colchester 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 lawyer we work with provide it.
William was the the leasehold proprietor of a conversion apartment in Colchester being marketed with a lease of a few days over fifty eight years remaining. William informally approached his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be payable on a lease extension were William to exercise his statutory right. William obtained expert advice and secured an acceptable deal informally and sell the property.
Last Christmas we were e-mailed by Mr and Mrs. O González , who was assigned a lease of a basement apartment in Colchester in April 2005. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparable flats in Colchester with 100 year plus lease were valued around £200,800. The mid-range amount of ground rent was £65 collected annually. The lease ended in 2086. Given that there were 60 years outstanding we approximated the premium to the freeholder to extend the lease to be between £20,900 and £24,200 not including fees.
Dr C Rogers moved into a newly refurbished flat in Colchester in July 2007. We are asked if we could approximate the price could be to extend the lease by an additional years. Identical flats in Colchester with 100 year plus lease were worth £255,000. The average ground rent payable was £50 collected every twelve months. The lease expired in 2097. Considering the 71 years outstanding we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.