Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Finchampstead. Clearly, the term of lease remaining reduces as time goes by. This may slip by relatively unnoticed when the flat or house has to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in Finchampstead have the right to extend the lease for an additional 90 years under legislation. Please give careful attention before delaying your Finchampstead lease extension. Holding off that expense now simply increases the price you will ultimately have to pay to extend your lease
It is generally considered that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Godiva Mortgages | 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. |
| 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. |
Retaining our service gives you better control over the value of your Finchampstead leasehold, as your property will be more valuable and marketable in terms 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.
Alexander owned a conversion flat in Finchampstead being sold with a lease of fraction over fifty eight years left. Alexander informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Alexander to invoke his statutory right. Alexander obtained expert advice and was able to make an informed judgement and handle with the matter and sell the property.
In 2012 we were phoned by Mr and Mrs. H Ramírez who, having took over the lease of a purpose-built apartment in Finchampstead in January 2001. We are asked if we could approximate the premium would be to extend the lease by an additional years. Identical premises in Finchampstead with a long lease were worth £255,000. The average ground rent payable was £50 billed annually. The lease terminated on 20 March 2095. Having 70 years outstanding we calculated the premium to the landlord for the lease extension to be between £10,500 and £12,000 plus legals.
Mr F Williams completed a ground floor apartment in Finchampstead in October 1997. The question was if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Similar residencies in Finchampstead with an extended lease were in the region of £246,800. The mid-range ground rent payable was £60 collected annually. The lease terminated in 2075. Given that there were 50 years as a residual term we calculated the premium to the landlord to extend the lease to be between £44,700 and £51,600 not including costs.