Unfortunately that a Earley 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 depreciation being disguised by increases in the Earley property prices.Where your lease has approximately 90 years left, you need to start considering 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 falls under eighty years - otherwise a higher premium will be payable. The majority of flat owners in Earley will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Earley with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 lawyers that we work with procure 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 conveyancer we work with provide it.
18 months ago Oscar, started to get close to the eighty-year threshold with the lease on his first floor flat in Earley. Having purchased his property 19 years ago, the lease term was of no concern. by good luck, he became aware that he needed to take steps soon on Extending the lease. Oscar extended the lease at the eleventh hour in April. Oscar and the freeholder subsequently agreed on an amount of £5,500 . If the lease had gone to less than 80 years, the figure would have increased by a minimum £1,025.
In 2011 we were approached by Mr and Mrs. D Patel who, having acquired a one bedroom flat in Earley in March 2004. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Comparable properties in Earley with a long lease were worth £181,600. The mid-range ground rent payable was £55 collected monthly. The lease elapsed in 2077. Taking into account 52 years remaining we estimated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 not including legals.
In 2014 we were called by Mr and Mrs. N Lefebvre who, having bought a basement apartment in Earley in January 2008. We are asked if we could approximate the price would be for a ninety year extension to my lease. Comparable premises in Earley with an extended lease were valued around £290,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease elapsed in 2097. Given that there were 72 years remaining we calculated the premium to the freeholder to extend the lease to be within £11,400 and £13,200 exclusive of costs.