For anyone whose Finedon property is held on a long lease, the message is clear – if you do nothing, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence 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 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; |
| Lloyds TSB Scotland | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Finedon 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.
Samuel owned a studio apartment in Finedon being sold with a lease of fraction over sixty years remaining. Samuel on an informal basis contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Samuel to exercise his statutory right. Samuel procured expert legal guidance and secured an acceptable deal informally and sell the flat.
In 2012 we were approached by Mr and Mrs. R Morel who, having moved into a newly refurbished apartment in Finedon in April 1997. The dilemma was if we could estimate the premium would be to prolong the lease by ninety years. Identical premises in Finedon with a long lease were valued about £250,000. The mid-range amount of ground rent was £50 billed yearly. The lease finished on 12 February 2095. Having 69 years remaining we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of expenses.
Last Christmas we were e-mailed by Mr E Edwards , who completed a ground floor flat in Finedon in September 2010. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Similar properties in Finedon with 100 year plus lease were valued around £290,000. The average ground rent payable was £60 billed yearly. The lease expiry date was on 7 April 2106. Considering the 80 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including professional charges.