The rule of thumb is, all other factors being equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Droitwich can extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Please think carefully before delaying your Droitwich lease extension. Postponing the costs now simply increases the premium you will ultimately have to pay for a lease extension.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 conveyancing solicitors that we work with procure Droitwich 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 conveyancer we work with provide it.
In the wake of eight months of protracted discussions with the freeholder of her studio apartment in Droitwich, Sarah commenced the lease extension process as the eighty year deadline was rapidly advancing. The lease extension was finalised in April 2011. The freeholder’s fees were kept to an absolute minimum.
Mr and Mrs. H Clarke took over the lease of a purpose-built apartment in Droitwich in May 2003. The dilemma was if we could approximate the price would be for a ninety year extension to my lease. Identical residencies in Droitwich with 100 year plus lease were worth £242,600. The mid-range ground rent payable was £45 invoiced per annum. The lease finished on 10 September 2092. Having 67 years remaining we approximated the premium to the landlord to extend the lease to be within £11,400 and £13,200 not including professional charges.
Last month we were called by Mr J Reed , who owned a recently refurbished flat in Droitwich in November 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Comparable homes in Droitwich with an extended lease were valued around £280,000. The mid-range ground rent payable was £55 collected yearly. The lease terminated on 23 May 2103. Given that there were 78 years remaining we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including costs.