Fareham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Fareham enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Fareham you must check if your lease has between 70 and ninety years remaining. There are good reasons why a Fareham leaseholder with a lease having around eighty years unexpired should take steps to ensure that a lease extension is actioned without delay
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Fareham 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 conveyancer we work with provide it.
Ryan owned a conversion apartment in Fareham on the market with a lease of fraction over 72 years left. Ryan informally contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Ryan to exercise his statutory right. Ryan obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
In 2012 we were contacted by Ms M Leroy who, having moved into a one bedroom flat in Fareham in November 2007. The question was if we could estimate the price could be to extend the lease by ninety years. Comparable properties in Fareham with an extended lease were in the region of £200,000. The average amount of ground rent was £50 invoiced yearly. The lease expired in 2103. Taking into account 77 years left we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of legals.
In 2011 we were e-mailed by Dr Andrew Davis who, having bought a basement flat in Fareham in August 2000. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by an additional years. Comparable homes in Fareham with an extended lease were worth £260,200. The mid-range amount of ground rent was £65 collected annually. The lease ran out in 2092. Having 66 years left we estimated the compensation to the freeholder for the lease extension to be between £16,200 and £18,600 exclusive of professional charges.