On the balance of probabilities if you own a flat in Fenny Stratford you actually own a long leasehold interest over your property
It is conventional wisdom that a property with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Fenny Stratford 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 conveyancer we work with provide it.
In recent months Leo, started to get close to the 80-year threshold with the lease on his basement flat in Fenny Stratford. In buying his property two decades ago, the length of the lease was of little relevance. Luckily, he recognised he needed to take steps soon on a lease extension. Leo arranged for a lease extension just under the wire in January. Leo and the freeholder via the management company eventually settled on an amount of £5,500 . If the lease had fallen lower than eighty years, the price would have increased by at least £900.
In 2014 we were approached by Dr Austin Mercier who, having purchased a ground floor apartment in Fenny Stratford in November 2012. The dilemma was if we could estimate the premium would likely be to prolong the lease by ninety years. Comparable residencies in Fenny Stratford with 100 year plus lease were worth £295,000. The average ground rent payable was £45 invoiced annually. The lease terminated on 17 April 2100. Having 74 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.
Last Winter we were approach by Dr Freddie Bernard , who acquired a one bedroom apartment in Fenny Stratford in August 2005. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Identical flats in Fenny Stratford with a long lease were valued about £243,000. The average ground rent payable was £65 billed annually. The lease expired on 5 January 2089. Having 63 years left we approximated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 not including fees.