The basic rule is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Fulford have the right to extend the lease for a further 90 years in accordance with statute. Do think carefully before delaying your Fulford lease extension. Postponing the costs now simply escalates the premium you will ultimately be required to pay to extend the lease.
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the residence will be worth the same as 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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 |
The conveyancers that we work with procure Fulford 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.
Stanley owned a studio flat in Fulford on the market with a lease of just over 59 years remaining. Stanley informally contacted his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Stanley to exercise his statutory right. Stanley procured expert advice and secured an acceptable resolution informally and readily saleable.
In 2011 we were approached by Dr William Clarke who, having bought a first floor flat in Fulford in November 2005. The dilemma was if we could estimate the premium would likely be to prolong the lease by a further 90 years. Identical residencies in Fulford with 100 year plus lease were valued around £218,000. The mid-range amount of ground rent was £45 billed monthly. The lease came to a finish in 2089. Given that there were 63 years left we approximated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 plus fees.
Mr and Mrs. U Davies acquired a purpose-built flat in Fulford in January 2001. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparable premises in Fulford with 100 year plus lease were worth £270,000. The average amount of ground rent was £55 billed per annum. The lease ran out in 2100. Having 74 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of legals.