Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Eaton Bray. Inevitably, the length of lease left reduces over time. This may slip by relatively unnoticed when the flat or house needs to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Qualifying leaseholders in Eaton Bray have the right to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. You should give careful consideration before delaying your Eaton Bray lease extension. Putting off that expense now simply increases the price you will eventually incur to extend your lease
Leasehold premises in Eaton Bray with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
The lawyers that we work with undertake Eaton Bray 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.
Milo owned a high value flat in Eaton Bray on the market with a lease of just over 61 years remaining. Milo informally spoke with his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Milo to exercise his statutory right. Milo obtained expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
In 2013 we were contacted by Mr and Mrs. F Taylor who, having bought a basement flat in Eaton Bray in April 2009. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable premises in Eaton Bray with an extended lease were worth £208,200. The mid-range amount of ground rent was £65 billed quarterly. The lease ended in 2087. Having 61 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 exclusive of costs.
In 2012 we were phoned by Mr and Mrs. N Taylor who, having purchased a ground floor apartment in Eaton Bray in June 1999. The question was if we could shed any light on how much (approximately) premium would likely be to extend the lease by ninety years. Comparative properties in Eaton Bray with an extended lease were worth £260,000. The mid-range ground rent payable was £50 billed per annum. The lease ran out on 26 July 2098. Having 72 years unexpired we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.