Finedon leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Finedon residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Finedon you should check if your lease has between 70 and 90 years left. There are good reasons why a Finedon leaseholder with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
The lawyers that we work with undertake 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.
18 months ago Matthew, came precariously near to the 80-year threshold with the lease on his garden flat in Finedon. In buying his flat 19 years previously, the length of the lease was of no significance. by good luck, he noticed he would imminently be paying an escalated premium for Extending the lease. Matthew arranged for a lease extension just under the wire last September. Matthew and the landlord who owned the flat above ultimately agreed on the final figure of £5,500 . If he failed to meet the deadline, the price would have become more costly by a minimum £1,025.
In 2010 we were e-mailed by Dr U Baker who, having took over the lease of a newly refurbished flat in Finedon in March 2005. The question was if we could estimate the premium would likely be for a ninety year lease extension. Similar properties in Finedon with an extended lease were worth £218,000. The mid-range ground rent payable was £45 collected yearly. The lease finished on 3 April 2088. Taking into account 63 years outstanding we calculated the premium to the landlord for the lease extension to be between £17,100 and £19,800 plus professional charges.
Last Winter we were e-mailed by Mr and Mrs. S Petit , who completed a purpose-built flat in Finedon in October 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar premises in Finedon with 100 year plus lease were valued around £265,000. The mid-range amount of ground rent was £50 billed per annum. The lease terminated in 2098. Taking into account 73 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.