Owning a flat usually means owning a lease of the property, which has a finite term of years. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Finchampstead. Clearly, the term of lease left shortens over time. This is often ignored and only becomes a problem when the flat or house has to be sold or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Finchampstead have the legal entitlement to extend the lease for an additional ninety years in accordance with legislation. Do give due deliberation before delaying your Finchampstead lease extension. Holding off that expense now only increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | 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. |
Regardless of whether you are a tenant or a landlord in Finchampstead,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Finchampstead valuers.
Trailing unsuccessful discussions with the landlord of her ground floor flat in Finchampstead, Morgan started the lease extension process as the eighty year deadline was fast advancing. The transaction was finalised in July 2006. The freeholder’s fees were kept to an absolute minimum.
Last Winter we were e-mailed by Mr and Mrs. D Ricardo , who purchased a first floor flat in Finchampstead in June 2001. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative properties in Finchampstead with an extended lease were in the region of £246,800. The mid-range ground rent payable was £60 invoiced quarterly. The lease expired on 22 August 2075. Considering the 50 years unexpired we approximated the premium to the landlord for the lease extension to be between £44,700 and £51,600 plus expenses.
Last month we were called by Dr M Bennett , who moved into a recently refurbished flat in Finchampstead in January 2007. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Identical premises in Finchampstead with an extended lease were valued around £208,200. The mid-range ground rent payable was £65 collected annually. The lease terminated in 2086. Taking into account 61 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 exclusive of fees.