The re-sale value of a leasehold property in Farnham Common is impacted by how many years the lease has remaining. If it is near to or fewer than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that all matters can be finalised well before the eighty year mark. Current legislation enables Farnham Common qualifying lessees to an additional term of ninety years on top of the remaining term, at a notional rent (no ground rent). The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Farnham Common with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. |
| Yorkshire 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. |
The conveyancers that we work with handle Farnham Common 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 conveyancing solicitor we work with provide it.
After lengthy discussions with the freeholder of her two bedroom apartment in Farnham Common, Bethany started the lease extension process just as the lease was nearing the crucial 80-year deadline. The transaction completed in May 2015. The freeholder’s costs were negotiated to a tad over four hundred GBP.
Last Autumn we were called by Dr R Bernard , who was assigned a lease of a basement apartment in Farnham Common in August 1998. The dilemma was if we could approximate the price would likely be to extend the lease by an additional years. Comparable residencies in Farnham Common with 100 year plus lease were valued around £168,800. The mid-range amount of ground rent was £60 collected every twelve months. The lease came to a finish in 2081. Considering the 55 years unexpired we calculated the premium to the landlord to extend the lease to be between £31,400 and £36,200 plus professional charges.
Last September we were approach by Mr and Mrs. J White , who acquired a studio flat in Farnham Common in June 1995. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Comparative homes in Farnham Common with a long lease were valued around £235,200. The average amount of ground rent was £45 collected every twelve months. The lease lapsed in 2092. Given that there were 66 years remaining we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of legals.