It’s a harsh certainty that a Ferring residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Ferring property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Ferring will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with handle Ferring 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.
Aiden owned a conversion apartment in Ferring being sold with a lease of a few days over 72 years remaining. Aiden on an informal basis approached his landlord a well known Manchester-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Aiden to invoke his statutory right. Aiden procured expert legal guidance and secured an acceptable deal without going to tribunal and sell the property.
Last Summer we were e-mailed by Mr and Mrs. P Norbert , who purchased a basement apartment in Ferring in March 2003. The question was if we could shed any light on how much (approximately) premium could be to prolong the lease by ninety years. Comparative properties in Ferring with an extended lease were worth £260,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease terminated on 2 June 2098. Given that there were 72 years left we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
Last August we were e-mailed by Mr and Mrs. D André , who owned a first floor flat in Ferring in September 1997. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Identical homes in Ferring with an extended lease were valued around £256,600. The average ground rent payable was £60 collected annually. The lease ended in 2078. Considering the 52 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of fees.