Owning a flat usually means owning a lease of the property, which has a set term of years. This lease will usually be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Costessey. Clearly, the term of lease remaining reduces over time. This is often ignored and only becomes a problem when the property needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Qualifying leaseholders in Costessey have the legal entitlement to extend the lease for an additional 90 years under legislation. Do give due deliberation before delaying your Costessey lease extension. Holding off that expense now likely increases the price you will ultimately incur to extend your lease
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
The conveyancers that we work with undertake Costessey 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.
Riley owned a high value flat in Costessey on the market with a lease of just over 61 years unexpired. Riley informally contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Riley to invoke his statutory right. Riley procured expert advice and was able to make an informed decision and deal with the matter and readily saleable.
Last Spring we were e-mailed by Mr and Mrs. D Gunderson , who took over the lease of a first floor apartment in Costessey in September 2011. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Similar properties in Costessey with a long lease were in the region of £218,000. The mid-range ground rent payable was £45 billed quarterly. The lease concluded in 2088. Given that there were 63 years remaining we estimated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 plus legals.
Last month we were called by Dr V Howard , who bought a purpose-built apartment in Costessey in September 1996. We are asked if we could approximate the price would be for a ninety year lease extension. Comparative premises in Costessey with an extended lease were in the region of £265,000. The average amount of ground rent was £55 collected annually. The lease ended on 23 October 2099. Given that there were 74 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including professional charges.