Unfortunately that a Fairwater residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Fairwater property market.Once your lease gets to 85ish years, you need to start considering 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 falls under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Fairwater will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
Leasehold residencies in Fairwater with in excess of 100 years remaining 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 upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Fairwater can be a difficult process. We recommend you get guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Fairwater lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of 9 months of unsuccessful negotiations with the freeholder of her garden apartment in Fairwater, Millie commenced the lease extension process as the 80 year deadline was rapidly coming. The transaction was concluded in May 2005. The freeholder’s fees were kept to an absolute minimum.
In 2011 we were approached by Mr and Mrs. L Richardson who, having bought a first floor apartment in Fairwater in August 2007. The question was if we could approximate the premium would be to extend the lease by 90 years. Comparable premises in Fairwater with 100 year plus lease were worth £280,000. The average ground rent payable was £45 invoiced every twelve months. The lease terminated on 28 June 2096. Having 70 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of expenses.
Mr and Mrs. P Mitchell bought a ground floor flat in Fairwater in January 1997. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by ninety years. Identical premises in Fairwater with 100 year plus lease were in the region of £223,400. The average ground rent payable was £60 invoiced yearly. The lease expired on 2 February 2085. Considering the 59 years outstanding we calculated the premium to the freeholder to extend the lease to be within £27,600 and £31,800 not including fees.