Filey leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Filey residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Filey you should check if your lease has between seventy and ninety years left. There are good reasons why a Filey flat owner with a lease having around 80 years left should take steps to ensure that a lease extension is put in place without delay
Leasehold residencies in Filey with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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 conveyancers that we work with handle Filey 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.
Nathaniel owned a 2 bedroom flat in Filey being marketed with a lease of fraction over sixty years outstanding. Nathaniel on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared 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 doubled every 25 years thereafter. No ground rent would be due on a lease extension were Nathaniel to exercise his statutory right. Nathaniel obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last Winter we were e-mailed by Dr Riley Harris , who took over the lease of a garden apartment in Filey in January 1996. We are asked if we could estimate the premium could be for a 90 year lease extension. Comparative homes in Filey with a long lease were worth £174,200. The mid-range amount of ground rent was £55 billed yearly. The lease concluded in 2077. Considering the 51 years remaining we calculated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus expenses.
Dr I Roberts completed a one bedroom flat in Filey in May 2002. The question was if we could estimate the price would likely be to extend the lease by an additional years. Similar flats in Filey with a long lease were in the region of £285,000. The average ground rent payable was £45 collected monthly. The lease expired on 24 September 2097. Having 71 years unexpired we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus expenses.