Finchampstead leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Finchampstead tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Finchampstead you would be well advised to investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold residencies in Finchampstead with over 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 premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Finchampstead 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 lawyer we work with provide it.
Subsequent to protracted negotiations with the freeholder of her garden apartment in Finchampstead, Madeleine started the lease extension process just as the lease was approaching the critical 80-year deadline. The lease extension completed in January 2013. The landlord’s costs were negotiated to less than 700 GBP.
In 2009 we were approached by Dr Kelsey Rivera who, having purchased a purpose-built apartment in Finchampstead in June 2005. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Identical premises in Finchampstead with a long lease were worth £200,800. The mid-range ground rent payable was £65 invoiced annually. The lease came to a finish on 19 March 2086. Taking into account 60 years remaining we approximated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of expenses.
In 2012 we were phoned by Ms Ellie Michel who, having owned a one bedroom apartment in Finchampstead in August 2010. The question was if we could estimate the premium would be for a ninety year lease extension. Comparable homes in Finchampstead with an extended lease were in the region of £255,000. The mid-range amount of ground rent was £50 invoiced annually. The lease came to a finish on 13 May 2097. Given that there were 71 years remaining we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including legals.