Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Freshford. Inevitably, the period of lease left shortens as time goes by. This is often overlooked and only becomes a problem when the flat or house needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Eligible long lease owners in Freshford have the legal entitlement to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. Please give due attention before delaying your Freshford lease extension. Putting off the cost now only increases the price you will ultimately have to pay for a lease extension
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Freshford,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Freshford valuers.
Riley was the the leasehold owner of a studio flat in Freshford on the market with a lease of a little over 61 years outstanding. Riley on an informal basis contacted his landlord a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Riley to exercise his statutory right. Riley procured expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last month we were approach by Dr R Sharif , who moved into a newly refurbished flat in Freshford in October 2001. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Similar flats in Freshford with a long lease were in the region of £181,600. The mid-range ground rent payable was £55 invoiced annually. The lease elapsed on 14 February 2077. Taking into account 52 years unexpired we estimated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 plus expenses.
Mrs Holly Cox took over the lease of a purpose-built flat in Freshford in April 2000. The question was if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparative flats in Freshford with a long lease were valued around £285,000. The mid-range amount of ground rent was £45 collected annually. The lease expired in 2097. Given that there were 72 years outstanding we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of legals.