Fenham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Fenham tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Fenham you should check if your lease has between seventy and ninety years remaining. There are good reasons why a Fenham leaseholder with a lease having around 80 years unexpired should take steps to ensure that a lease extension is actioned without delay
Leasehold properties in Fenham with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify 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; |
| Godiva Mortgages | 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. |
| 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. |
Using our service gives you enhanced control over the value of your Fenham leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Eli, came dangerously near to the 80-year mark with the lease on his purpose- built flat in Fenham. Having purchased his home 19 years previously, the unexpired term was of no relevance. by good luck, he became aware that he would soon be paying way over the odds for a lease extension. Eli was able to extend his lease just under the wire in April. Eli and the landlord subsequently agreed on an amount of £5,000 . If he failed to meet the deadline, the premium would have gone up by a minimum £975.
Last year we were called by Mr N Evans , who was assigned a lease of a one bedroom flat in Fenham in October 2012. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical premises in Fenham with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £65 invoiced yearly. The lease end date was in 2094. Given that there were 68 years remaining we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.
In 2014 we were approached by Mr and Mrs. I Ali who, having acquired a purpose-built apartment in Fenham in January 2012. We are asked if we could approximate the price could be to extend the lease by an additional years. Identical flats in Fenham with an extended lease were valued around £208,600. The mid-range ground rent payable was £60 invoiced every twelve months. The lease termination date was in 2083. Considering the 57 years outstanding we estimated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus fees.