Fleetwood leases on residential properties are gradually diminishing in 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. It is the case that most Fleetwood 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 Fleetwood you must see if your lease has between seventy and ninety years remaining. There are good reasons why a Fleetwood flat owner with a lease having around 80 years unexpired should take steps to make sure that a lease extension is effected without delay
Leasehold premises in Fleetwood with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you better control over the value of your Fleetwood leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Ali, started to get near to the eighty-year threshold with the lease on his two bedroom flat in Fleetwood. Having bought his flat two decades ago, the lease term was of minimal relevance. Thankfully, he noticed he needed to take action soon on a lease extension. Ali was able to extend his lease just under the wire in April. Ali and the freeholder eventually agreed on an amount of £5,500 . If the lease had dipped lower than eighty years, the figure would have become more exhorbitant by at least £1,075.
In 2011 we were e-mailed by Dr O Stewart who, having completed a garden flat in Fleetwood in March 2005. We are asked if we could estimate the premium would be to extend the lease by ninety years. Comparable properties in Fleetwood with an extended lease were worth £191,000. The average amount of ground rent was £65 collected annually. The lease ran out in 2084. Taking into account 58 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 exclusive of legals.
Mr Harrison Roberts bought a purpose-built apartment in Fleetwood in May 2011. The dilemma was if we could shed any light on how much (approximately) price could be for a ninety year extension to my lease. Comparable premises in Fleetwood with 100 year plus lease were worth £250,000. The average amount of ground rent was £50 invoiced every twelve months. The lease ended on 4 July 2095. Considering the 69 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.