The market value of Felixstowe leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the remaining term is less than eighty years
Leasehold properties in Felixstowe with more than one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit 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 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; |
| Chelsea 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. |
| National Westminster Bank | 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. |
Lease extensions in Felixstowe can be a difficult process. We recommend you obtain professional help 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 in-depth market knowledge dealing with Felixstowe lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Elijah, came dangerously near to the 80-year mark with the lease on his two bedroom apartment in Felixstowe. Having purchased his home 19 years previously, the lease term was of little relevance. by good luck, he noticed he needed to take action soon on Extending the lease. Elijah extended the lease just in the nick of time in January. Elijah and the landlord subsequently agreed on the final figure of £6,000 . If the lease had descended to less than eighty years, the figure would have gone up by a minimum £850.
In 2009 we were phoned by Ms H Brooks who, having took over the lease of a purpose-built flat in Felixstowe in November 2010. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by ninety years. Similar flats in Felixstowe with 100 year plus lease were in the region of £198,800. The average ground rent payable was £55 invoiced annually. The lease elapsed in 2080. Taking into account 55 years remaining we approximated the premium to the landlord to extend the lease to be within £33,300 and £38,400 exclusive of fees.
Ms Tia Rivera acquired a purpose-built apartment in Felixstowe in August 2012. We are asked if we could approximate the price would likely be for a ninety year lease extension. Comparable properties in Felixstowe with an extended lease were in the region of £295,000. The average amount of ground rent was £45 collected monthly. The lease expired in 2100. Considering the 75 years left we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.