Unfortunately that a Essington residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Essington property prices.Once your lease gets to 85ish years, you should start thinking about 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 slips below 80 years - otherwise a higher premium will be due. The majority of flat owners in Essington will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the process.
Leasehold premises in Essington with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify 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; |
| Birmingham Midshires | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Essington,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Essington valuers.
Off the back of protracted correspondence with the landlord of her first floor flat in Essington, Ella started the lease extension process as the eighty year threshold was swiftly approaching. The transaction was concluded in June 2014. The freeholder’s fees were negotiated to less than four hundred GBP.
In 2013 we were called by Mrs Holly López who, having moved into a ground floor flat in Essington in March 1996. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative premises in Essington with an extended lease were in the region of £193,400. The average ground rent payable was £65 invoiced every twelve months. The lease elapsed in 2085. Having 59 years left we calculated the premium to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of expenses.
In 2013 we were e-mailed by Dr Morgan Mason who, having owned a garden flat in Essington in March 2005. The dilemma was if we could approximate the price would be for a 90 year lease extension. Comparable residencies in Essington with an extended lease were in the region of £250,000. The mid-range ground rent payable was £50 invoiced yearly. The lease elapsed on 17 June 2096. Taking into account 70 years left we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.