For anyone whose Fairwater home is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
Leasehold residencies in Fairwater with more than one hundred 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 circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you increased control over the value of your Fairwater leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Ben, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Fairwater. Having bought his property 19 years previously, the lease term was of little bearing. by good luck, he noticed he would soon be paying way over the odds for a lease extension. Ben arranged for a lease extension just under the wire last September. Ben and the landlord who owned the flat above subsequently settled on the final figure of £5,000 . If he not met the deadline, the premium would have gone up by at least £950.
Last Summer we were contacted by Mr and Mrs. W Howard , who bought a basement apartment in Fairwater in March 2003. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Identical residencies in Fairwater with a long lease were valued about £171,800. The average amount of ground rent was £55 collected every twelve months. The lease expired in 2076. Given that there were 50 years remaining we estimated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including legals.
Mr and Mrs. D Thompson completed a ground floor apartment in Fairwater in June 2006. The question was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar flats in Fairwater with a long lease were valued about £280,000. The mid-range amount of ground rent was £45 billed yearly. The lease lapsed in 2096. Having 70 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus expenses.