Cullompton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Cullompton tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Cullompton you should investigate if your lease has between 70 and 90 years left. There are compelling reasons why a Cullompton flat owner with a lease having around eighty years left should take action to ensure that a lease extension is actioned without delay
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 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. |
| Yorkshire 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. |
The conveyancing solicitors that we work with undertake Cullompton 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.
Subsequent to lengthy correspondence with the freeholder of her one bedroom flat in Cullompton, Niamh commenced the lease extension process as the eighty year threshold was swiftly nearing. The transaction was concluded in July 2015. The freeholder’s charges were restricted to below six hundred GBP.
Dr Aaron Hernández took over the lease of a first floor apartment in Cullompton in April 2009. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by an additional years. Similar flats in Cullompton with an extended lease were worth £235,200. The average amount of ground rent was £45 collected quarterly. The lease ended in 2092. Given that there were 66 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of legals.
In 2009 we were e-mailed by Dr Eli Rose who, having purchased a basement flat in Cullompton in November 2010. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Identical properties in Cullompton with an extended lease were valued about £275,000. The average ground rent payable was £55 billed monthly. The lease ended in 2103. Having 77 years remaining we estimated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 not including expenses.