Feltwell residential property held on a long lease is a depreciating asset because a leaseholder only owns the property for a period of years.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Feltwell 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 lawyer we work with provide it.
14 months ago Logan, came precariously near to the 80-year mark with the lease on his two bedroom apartment in Feltwell. In buying his flat two decades ago, the unexpired term was of no importance. Thankfully, he realised he would imminently be paying an escalated premium for Extending the lease. Logan was able to extend his lease at the eleventh hour in April. Logan and the landlord who owned the flat above subsequently settled on a premium of £5,000 . If the lease had dipped below 80 years, the figure would have become more costly by at least £1,050.
In 2014 we were phoned by Mr and Mrs. D García who, having owned a first floor flat in Feltwell in May 2002. We are asked if we could approximate the price could be for a ninety year lease extension. Identical flats in Feltwell with 100 year plus lease were in the region of £246,800. The average amount of ground rent was £60 invoiced every twelve months. The lease termination date was in 2076. Given that there were 50 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 plus professional charges.
Last Summer we were approach by Mr James Parker , who bought a newly refurbished flat in Feltwell in August 2012. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Feltwell with an extended lease were in the region of £208,200. The mid-range amount of ground rent was £65 collected monthly. The lease ended on 16 July 2087. Having 61 years remaining we calculated the compensation to the landlord to extend the lease to be within £20,000 and £23,000 not including professional charges.