It’s a harsh truth that a Fairwater 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 Fairwater property prices.Once your lease nears 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 dips below eighty years - otherwise a higher premium will be payable. Most flat owners in Fairwater will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold properties in Fairwater with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Fairwater 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.
Aiden owned a conversion apartment in Fairwater being marketed with a lease of a little over 59 years remaining. Aiden on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Aiden to invoke his statutory right. Aiden obtained expert advice and secured satisfactory resolution informally and sell the flat.
In 2014 we were approached by Dr Laura David who, having acquired a purpose-built flat in Fairwater in April 1999. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Identical premises in Fairwater with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £45 billed per annum. The lease terminated in 2095. Having 69 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including legals.
Last Summer we were e-mailed by Dr Henry Roux , who purchased a one bedroom apartment in Fairwater in June 2008. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Comparable premises in Fairwater with 100 year plus lease were valued about £216,000. The average ground rent payable was £60 collected monthly. The lease lapsed on 26 October 2084. Taking into account 58 years outstanding we estimated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 not including fees.