On the balance of probabilities where you own a flat in Farnham Common you actually own a long leasehold interest over your property
Leasehold premises in Farnham Common with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | 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. |
| 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. |
Lease extensions in Farnham Common can be a difficult process. We recommend you procure guidance from a lawyer and surveyor with experience in lease extensions.
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 dealing with Farnham Common lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Oscar, started to get close to the 80-year mark with the lease on his first floor apartment in Farnham Common. Having purchased his home two decades ago, the unexpired term was of minimal interest. Thankfully, he recognised he needed to take steps soon on a lease extension. Oscar extended the lease just under the wire last May. Oscar and the landlord who owned the flat above subsequently agreed on sum of £5,500 . If he not met the deadline, the price would have become more exhorbitant by at least £950.
Last Autumn we were contacted by Mr and Mrs. Y Ricardo , who bought a purpose-built flat in Farnham Common in July 1997. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by 90 years. Similar residencies in Farnham Common with an extended lease were valued around £249,200. The average ground rent payable was £60 invoiced quarterly. The lease came to a finish in 2077. Considering the 51 years unexpired we estimated the premium to the landlord for the lease extension to be between £42,800 and £49,400 plus legals.
In 2013 we were contacted by Mr and Mrs. J Khan who, having moved into a ground floor apartment in Farnham Common in July 2007. We are asked if we could approximate the price could be to prolong the lease by a further 90 years. Similar flats in Farnham Common with 100 year plus lease were worth £210,600. The mid-range ground rent payable was £65 invoiced annually. The lease termination date was in 2088. Given that there were 62 years outstanding we approximated the premium to the landlord for the lease extension to be between £18,100 and £20,800 exclusive of fees.