Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Cowley. Clearly, the term of lease remaining reduces as time goes by. This is often overlooked and only becomes a problem when the flat or house needs to be sold or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Qualifying long lease owners in Cowley have the legal entitlement to extend the lease for a further ninety years in accordance with Leasehold Reform legislation. You should give careful attention before putting off your Cowley lease extension. Putting off that expense now simply increases the price you will ultimately have to pay for a lease extension
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 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. |
| Lloyds TSB Scotland | 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. |
The conveyancers that we work with procure Cowley 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.
Aarav owned a 2 bedroom apartment in Cowley being marketed with a lease of a few days over 72 years unexpired. Aarav informally approached his landlord being a well known London-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Aarav to invoke his statutory right. Aarav obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
Mr and Mrs. E Bell took over the lease of a basement apartment in Cowley in January 2011. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Comparative premises in Cowley with 100 year plus lease were worth £205,000. The average ground rent payable was £50 invoiced monthly. The lease finished on 20 November 2105. Considering the 79 years as a residual term we calculated the premium to the landlord to extend the lease to be between £7,600 and £8,800 plus professional charges.
An example of a Freehold Enfranchisement decision for a Cowley flat is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case was in relation to 2 flats. The remaining number of years on the lease was 69 years.