Folkestone leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Folkestone tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Folkestone you really ought to check if your lease has between seventy and 90 years remaining. There are good reasons why a Folkestone leaseholder with a lease having around 80 years left should take action to ensure that a lease extension is put in place without delay
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years 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. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Folkestone,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Folkestone valuers.
Noah owned a high value flat in Folkestone on the market with a lease of fraction over 59 years left. Noah informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Noah to exercise his statutory right. Noah procured expert advice and secured satisfactory deal informally and sell the property.
In 2009 we were approached by Mr and Mrs. K Cook who, having moved into a one bedroom flat in Folkestone in March 1995. We are asked if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Folkestone with an extended lease were valued about £235,200. The mid-range ground rent payable was £45 billed quarterly. The lease lapsed on 21 June 2091. Considering the 66 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 plus legals.
In 2011 we were phoned by Dr Jude Bonnet who, having took over the lease of a recently refurbished apartment in Folkestone in January 2008. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by ninety years. Identical properties in Folkestone with 100 year plus lease were valued around £280,000. The average amount of ground rent was £55 collected monthly. The lease expired in 2102. Given that there were 77 years left we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus legals.