Unfortunately that a Farnham residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Farnham property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Farnham will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Farnham with more than 100 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 freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Farnham,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Farnham valuers.
After protracted negotiations with the freeholder of her leasehold apartment in Farnham, Stephanie initiated the lease extension process just as her lease was coming close to the crucial 80-year deadline. The lease extension was concluded in April 2012. The landlord’s costs were negotiated to slightly above four hundred GBP.
In 2011 we were approached by Dr R Ward who, having moved into a ground floor flat in Farnham in February 2009. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparable properties in Farnham with 100 year plus lease were in the region of £257,800. The mid-range ground rent payable was £65 billed monthly. The lease terminated on 17 May 2090. Given that there were 65 years unexpired we calculated the premium to the landlord for the lease extension to be within £18,100 and £20,800 plus costs.
In 2011 we were phoned by Ms Mollie Rose who, having took over the lease of a ground floor flat in Farnham in August 2007. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Identical flats in Farnham with 100 year plus lease were worth £191,400. The average amount of ground rent was £55 billed annually. The lease termination date was on 28 August 2079. Given that there were 54 years left we estimated the compensation to the freeholder to extend the lease to be between £34,200 and £39,600 plus costs.