Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Fairwater. Inevitably, the term of lease left reduces as time goes by. This is often overlooked and only becomes a problem when the flat or house needs to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Qualifying leaseholders in Fairwater have the right to extend the lease for an additional 90 years in accordance with legislation. You should give due deliberation before putting off your Fairwater lease extension. Putting off that expense now likely increases the price you will ultimately have to pay for a lease extension
Leasehold premises in Fairwater with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Fairwater leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Michael, came precariously near to the eighty-year threshold with the lease on his ground floor flat in Fairwater. Having bought his home two decades ago, the length of the lease was of little relevance. Fortunately, he recognised he would soon be paying an escalated premium for a lease extension. Michael was able to extend his lease at the eleventh hour in August. Michael and the freeholder ultimately agreed on a premium of £6,000 . If he failed to meet the deadline, the sum would have gone up by a minimum £950.
Mr and Mrs. E Green moved into a purpose-built flat in Fairwater in July 1999. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparable residencies in Fairwater with an extended lease were worth £285,000. The mid-range ground rent payable was £45 invoiced monthly. The lease ended in 2097. Having 71 years as a residual term we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus fees.
Last Summer we were approach by Mr and Mrs. T Williams , who bought a basement flat in Fairwater in February 2003. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Identical premises in Fairwater with 100 year plus lease were in the region of £225,800. The mid-range amount of ground rent was £60 collected per annum. The lease expired in 2086. Considering the 60 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £23,800 and £27,400 plus professional charges.