Unfortunately that a Exton residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Exton property market.Where your lease has approximately ninety years left, 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 lower than eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Exton will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
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 residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Exton 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 conveyancing solicitor we work with provide it.
14 months ago Seth, started to get near to the eighty-year mark with the lease on his basement flat in Exton. In buying his home twenty years ago, the length of the lease was of no interest. Fortunately, he noticed he needed to take action soon on a lease extension. Seth arranged for a lease extension just under the wire in June. Seth and the landlord eventually agreed on a premium of £5,000 . If the lease had dipped below 80 years, the premium would have become more costly by a minimum £1,150.
In 2011 we were phoned by Dr K Davies who, having bought a basement apartment in Exton in September 1997. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparative properties in Exton with a long lease were worth £200,000. The mid-range ground rent payable was £50 invoiced monthly. The lease ran out on 8 August 2103. Having 78 years remaining we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of expenses.
In 2009 we were called by Mr and Mrs. U Roberts who, having purchased a recently refurbished flat in Exton in April 2008. We are asked if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Comparative residencies in Exton with an extended lease were worth £267,600. The mid-range ground rent payable was £65 billed annually. The lease end date was on 11 June 2092. Taking into account 67 years remaining we estimated the premium to the freeholder to extend the lease to be within £14,300 and £16,400 exclusive of professional charges.