For anyone whose East Dean home is held on a long lease, the message is clear – if you ignore the situation, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in East Dean can be a difficult process. We recommend you secure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring East Dean lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of 6 months of unsuccessful correspondence with the freeholder of her ground floor apartment in East Dean, Charlotte commenced the lease extension process just as the lease was approaching the crucial 80-year mark. The legal work completed in October 2014. The freeholder’s costs were kept to an absolute minimum.
In 2012 we were phoned by Mrs S Moreau who, having acquired a one bedroom apartment in East Dean in April 1996. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar flats in East Dean with an extended lease were in the region of £223,400. The average amount of ground rent was £60 billed monthly. The lease lapsed in 2085. Taking into account 59 years left we approximated the compensation to the freeholder to extend the lease to be within £27,600 and £31,800 not including professional charges.
In 2010 we were approached by Mr Blake Martinez who, having bought a recently refurbished flat in East Dean in April 2004. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable residencies in East Dean with an extended lease were worth £210,000. The average amount of ground rent was £50 collected yearly. The lease ran out in 2105. Considering the 79 years outstanding we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 not including expenses.