For anyone whose Frenchay Common property is held on a long lease, our message is clear – if nothing is done, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension.
Leasehold residencies in Frenchay Common with over 100 years left on the lease are often 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 to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancers that we work with procure Frenchay Common 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 conveyancing solicitor we work with provide it.
Jake owned a studio flat in Frenchay Common being sold with a lease of a little over 59 years remaining. Jake on an informal basis spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Jake to exercise his statutory right. Jake procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2009 we were contacted by Dr Aiden Leroy who, having bought a ground floor flat in Frenchay Common in July 1997. The question was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparative properties in Frenchay Common with a long lease were valued around £275,000. The average ground rent payable was £55 invoiced yearly. The lease ended in 2101. Taking into account 76 years remaining we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus expenses.
Last Winter we were e-mailed by Mr I Bailey , who was assigned a lease of a one bedroom apartment in Frenchay Common in October 2003. We are asked if we could approximate the premium would likely be to prolong the lease by ninety years. Comparable homes in Frenchay Common with a long lease were worth £176,200. The average ground rent payable was £65 invoiced quarterly. The lease ended in 2081. Having 56 years remaining we approximated the compensation to the freeholder to extend the lease to be between £29,500 and £34,000 exclusive of professional charges.