Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Empingham. Inevitably, the length of lease remaining reduces over time. This may pass by relatively unnoticed when the flat or house needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Qualifying long lease owners in Empingham have the right to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. You should give careful deliberation before putting off your Empingham lease extension. Holding off the cost now only increases the price you will eventually incur for a lease extension
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence 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; |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Empingham,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Empingham valuers.
Dylan was the the leasehold owner of a high value apartment in Empingham on the market with a lease of fraction over 59 years remaining. Dylan informally approached his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dylan to invoke his statutory right. Dylan obtained expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2011 we were e-mailed by Mr T Sánchez who, having owned a studio apartment in Empingham in September 2005. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Similar flats in Empingham with a long lease were in the region of £223,400. The mid-range ground rent payable was £60 invoiced per annum. The lease expiry date was in 2084. Having 59 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £27,600 and £31,800 plus expenses.
In 2010 we were e-mailed by Mr Tyler Nelson who, having purchased a newly refurbished flat in Empingham in November 2011. The question was if we could approximate the premium would be for a 90 year extension to my lease. Comparative flats in Empingham with a long lease were in the region of £205,000. The mid-range ground rent payable was £50 billed annually. The lease came to a finish in 2104. Given that there were 79 years remaining we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including professional charges.