Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Ferring and Goring. Clearly, the term of lease remaining reduces as time goes by. This is often ignored and only raises itself as an issue when the property needs to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to extend the lease. Qualifying leaseholders in Ferring and Goring have the legal entitlement to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. You should give due consideration before putting off your Ferring and Goring lease extension. Holding off the cost now only increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Ferring and Goring 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 conveyancing solicitor we work with provide it.
Two years ago Hugo, started to get near to the eighty-year mark with the lease on his purpose- built apartment in Ferring and Goring. In buying his home 18 years ago, the length of the lease was of minimal importance. Fortunately, it dawned on him that he would imminently be paying way over the odds for a lease extension. Hugo arranged for a lease extension just ahead of time in August. Hugo and the landlord who owned the flat above ultimately agreed on sum of £6,000 . If the lease had dipped lower than 80 years, the price would have escalated by at least £975.
In 2010 we were contacted by Dr B Nguyen who, having purchased a one bedroom flat in Ferring and Goring in June 2006. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Comparative properties in Ferring and Goring with 100 year plus lease were in the region of £193,400. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease ended on 22 August 2084. Given that there were 59 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 plus fees.
In 2014 we were called by Mr Milo Lee who, having completed a recently refurbished apartment in Ferring and Goring in November 2000. The dilemma was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparative residencies in Ferring and Goring with an extended lease were worth £255,000. The average ground rent payable was £50 invoiced per annum. The lease ended in 2095. Given that there were 70 years as a residual term we approximated the premium to the landlord for the lease extension to be between £10,500 and £12,000 exclusive of expenses.