Chances are that if you own a flat in Earley you actually own a long leasehold interest over your property
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Earley 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.
After unsuccessful negotiations with the freeholder of her ground floor apartment in Earley, Laura initiated the lease extension process just as her lease was coming close to the all-important 80-year deadline. The lease extension was concluded in November 2007. The freeholder’s costs were negotiated to about 550 GBP.
In 2011 we were e-mailed by Mr Callum White who, having took over the lease of a ground floor flat in Earley in July 1995. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Similar properties in Earley with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 invoiced annually. The lease ran out on 12 April 2096. Taking into account 71 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus professional charges.
Ms Isabel Torres owned a garden apartment in Earley in March 2010. The question was if we could shed any light on how much (roughly) price could be to extend the lease by a further 90 years. Comparable residencies in Earley with a long lease were worth £230,800. The average ground rent payable was £60 invoiced quarterly. The lease finished in 2085. Given that there were 60 years as a residual term we estimated the premium to the landlord for the lease extension to be within £24,700 and £28,600 exclusive of costs.