For those whose Finchampstead home is held on a long lease, our message is clear – if you do nothing, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Halifax | 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 30 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with procure 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.
Last October Sam, came critically near to the 80-year mark with the lease on his ground floor flat in Finchampstead. In buying his property 18 years ago, the unexpired term was of minimal importance. Thankfully, he realised he would soon be paying an inflated amount for a lease extension. Sam was able to extend his lease just under the wire last April. Sam and the freeholder via the managing agents subsequently settled on the final figure of £6,000 . If he not met the deadline, the amount would have gone up by a minimum £1,100.
Mr and Mrs. P Alexander moved into a one bedroom apartment in Finchampstead in November 2000. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Identical properties in Finchampstead with an extended lease were in the region of £270,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease expired in 2101. Having 75 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.
In 2012 we were e-mailed by Dr E Howard who, having bought a first floor apartment in Finchampstead in August 2006. The question was if we could estimate the price could be to extend the lease by a further 90 years. Identical flats in Finchampstead with 100 year plus lease were in the region of £173,800. The average ground rent payable was £60 invoiced monthly. The lease termination date was in 2081. Having 55 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 plus costs.