Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will normally be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Fetcham. Inevitably, the term of lease left reduces as time goes by. This is often overlooked and only becomes a problem when the flat or house has to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension. Eligible leaseholders in Fetcham have the right to extend the lease for a further 90 years under statute. Please give careful attention before putting off your Fetcham lease extension. Putting off the cost now simply increases the price you will eventually have to pay to extend your lease
Leasehold residencies in Fetcham with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Coventry Building Society | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Fetcham leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Thomas owned a 2 bedroom apartment in Fetcham on the market with a lease of a few days over 61 years remaining. Thomas informally spoke with his freeholder a well known London-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 rise in the rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Thomas to exercise his statutory right. Thomas procured expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last month we were phoned by Ms O Allen , who acquired a purpose-built apartment in Fetcham in May 2011. The question was if we could approximate the premium would be to extend the lease by an additional years. Comparative premises in Fetcham with 100 year plus lease were valued about £250,000. The average ground rent payable was £50 billed per annum. The lease elapsed in 2094. Given that there were 69 years unexpired we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.
Last Spring we were contacted by Dr W Jones , who acquired a first floor apartment in Fetcham in November 2007. We are asked if we could estimate the price would be for a 90 year lease extension. Comparative properties in Fetcham with a long lease were in the region of £285,000. The average amount of ground rent was £55 collected monthly. The lease finished in 2105. Given that there were 80 years as a residual term we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus legals.