Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will ordinarily be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Gillingham. Clearly, the length of lease remaining reduces as time goes by. This is often ignored and only becomes a problem when the residence needs to be sold or refinanced. The shorter the lease the less it is worth and the more it will cost to extend the lease. Eligible leaseholders in Gillingham have the right to extend the lease for a further 90 years in accordance with legislation. Do give careful deliberation before delaying your Gillingham lease extension. Putting off that expense now simply increases the price you will eventually incur to extend your lease
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 handle Gillingham 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.
Following lengthy discussions with the freeholder of her studio flat in Gillingham, Aimee initiated the lease extension process as the 80 year mark was quickly nearing. The legal work was finalised in March 2008. The freeholder’s charges were negotiated to under 650 pounds.
Mr and Mrs. C André bought a garden flat in Gillingham in August 2007. The question was if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Identical properties in Gillingham with a long lease were in the region of £270,000. The average amount of ground rent was £55 invoiced yearly. The lease finished on 27 June 2101. Given that there were 75 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
In 2012 we were phoned by Mr Zachary Thompson who, having acquired a first floor apartment in Gillingham in August 2008. The question was if we could shed any light on how much (roughly) premium would be to extend the lease by an additional years. Comparable homes in Gillingham with an extended lease were worth £173,800. The mid-range amount of ground rent was £60 invoiced annually. The lease termination date was on 20 April 2081. Given that there were 55 years remaining we estimated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 not including expenses.