Owning a apartment usually means owning a lease of the property, which has a finite term of years. This 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 Ferryside. Inevitably, the length of lease left shortens over time. This may slip by relatively unnoticed when the flat or house needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to extend the lease. Eligible leaseholders in Ferryside have the right to extend the lease for an additional 90 years under legislation. Please give due attention before delaying your Ferryside lease extension. Holding off the cost now simply increases the price you will ultimately have to pay to extend your lease
Leasehold premises in Ferryside with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaing from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
The conveyancing solicitors that we work with handle Ferryside 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.
Ali owned a studio flat in Ferryside being marketed with a lease of a few days over 59 years unexpired. Ali on an informal basis spoke with his landlord being a well known local-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Ali to exercise his statutory right. Ali obtained expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Dr V Phillips acquired a garden flat in Ferryside in March 2007. We are asked if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Identical homes in Ferryside with 100 year plus lease were valued around £295,000. The mid-range ground rent payable was £50 collected quarterly. The lease ended on 9 May 2098. Taking into account 75 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
In 2013 we were e-mailed by Dr John Jones who, having bought a one bedroom flat in Ferryside in November 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Identical premises in Ferryside with 100 year plus lease were valued around £250,400. The average ground rent payable was £65 collected quarterly. The lease ended on 1 July 2087. Taking into account 64 years remaining we estimated the premium to the landlord to extend the lease to be between £19,000 and £22,000 plus professional charges.