For those whose East Harling property is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle East Harling 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 lawyer we work with provide it.
Ryan was the the leasehold owner of a conversion apartment in East Harling on the market with a lease of a little over 59 years outstanding. Ryan informally approached his landlord a well known Manchester-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Ryan to invoke his statutory right. Ryan obtained expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Mrs B Campbell completed a newly refurbished apartment in East Harling in March 2004. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Comparative residencies in East Harling with 100 year plus lease were worth £246,800. The mid-range ground rent payable was £60 collected monthly. The lease terminated in 2075. Having 50 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £44,700 and £51,600 not including legals.
Mr and Mrs. B Nguyen completed a ground floor apartment in East Harling in August 2007. We are asked if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Similar flats in East Harling with an extended lease were in the region of £200,800. The average amount of ground rent was £65 invoiced monthly. The lease ran out in 2085. Having 60 years left we approximated the premium to the landlord for the lease extension to be between £20,900 and £24,200 not including costs.