The basic rule is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Faringdon may extend the lease for an additional 90 years in accordance with legislation. Do think carefully before delaying your Faringdon lease extension. Shelving that expense now simply increases the amount you will eventually have to pay to extend the lease.
Leasehold premises in Faringdon with over 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 property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 Faringdon 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.
Gabriel owned a high value flat in Faringdon on the market with a lease of just over 59 years outstanding. Gabriel informally approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Gabriel to exercise his statutory right. Gabriel obtained expert advice and secured satisfactory resolution without going to tribunal and readily saleable.
Last month we were called by Mrs Caitlin Hall , who completed a basement apartment in Faringdon in October 2012. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Comparative residencies in Faringdon with 100 year plus lease were in the region of £300,000. The mid-range amount of ground rent was £50 billed monthly. The lease finished on 7 June 2101. Considering the 76 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of costs.
In 2011 we were approached by Mr and Mrs. O Vincent who, having purchased a ground floor apartment in Faringdon in October 1995. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Identical properties in Faringdon with 100 year plus lease were valued about £257,800. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease finished on 15 March 2090. Having 65 years remaining we estimated the premium to the landlord for the lease extension to be between £17,100 and £19,800 plus legals.