Unfortunately that a Drybrook residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Drybrook property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher amount will be payable. Most flat owners in Drybrook will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
Leasehold properties in Drybrook with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Godiva Mortgages | 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Irrespective of whether you are a tenant or a landlord in Drybrook,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Drybrook valuers.
Jason was the the leasehold owner of a high value apartment in Drybrook being marketed with a lease of just over 59 years unexpired. Jason on an informal basis spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Jason to exercise his statutory right. Jason procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
In 2014 we were called by Mr and Mrs. U Adams who, having took over the lease of a basement flat in Drybrook in March 1999. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Similar residencies in Drybrook with an extended lease were worth £280,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease terminated in 2096. Taking into account 70 years outstanding we estimated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus legals.
Dr N Davis owned a studio flat in Drybrook in May 2006. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable homes in Drybrook with a long lease were in the region of £223,400. The average ground rent payable was £60 billed annually. The lease ran out in 2085. Having 59 years unexpired we approximated the premium to the freeholder to extend the lease to be within £27,600 and £31,800 not including costs.