Grange Park residential property held on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
Leasehold premises in Grange Park with more than one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Nationwide Building Society | - Our minimum unexpired lease term is 55 years. - There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start). Ground Rents and event fees must be reasonable at all times during the term of the lease. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us for Valuer consideration. See the guidance below. SECOND HAND PROPERTIES Unacceptable - advise Issuing Office (Will be declined): - Unexpired lease term <55 years - <30 years remaining at the end of the mortgage term - Ground Rent >0.5% of the property value - Ground Rent doubles <every 20 years (e.g. doubles every 5, 10 or 15 years) - Ground Rent is compounded RPI - Ground Rent review period ≤5 years Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability): - Unexpired lease term is 55 to 85 years - Ground Rent >0.1% and ≤0.5% of the property value - Ground Rent escalation is linked to any indices greater than RPI - Ground Rent escalation is linked to the value of the building* - Ground Rent review period is >5 and <10 years - Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc - Estate Rent Charges >£500 p/a (please provide details of what the charges cover) - Service Charges >0.5% of property value p/a (please provide details of what the charges cover) - Anything that appears onerous, unusual or out of the ordinary Acceptable (no requirement to advise Issuing Office): - Unexpired lease term >85 years - Ground Rent ≤0.1% of the property value - Ground Rent review period ≥10 years - Ground Rent escalation ≤RPI NEW BUILD PROPERTIES (includes office conversions) Unacceptable - advise Issuing Office (Will be declined) - Unexpired lease term <125 years on a new build flat or <250 years on a new build house (does not apply to Shared Ownership) - Starting Ground Rent >0.1% of the property value - Ground Rent review period ≤ 5 years - Ground Rent doubles < every 20 years (e.g. doubles every 5, 10 or 15 years) - Ground Rent is compounded RPI Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability): - Ground Rent is linked to any indices greater than RPI - Ground Rent is linked to the value of the building* - Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc - Estate Rent Charges >£500 p/a (please provide details of what the charges cover) - Service Charges >0.5% of property value p/a (please provide details of what the charges cover) - Anything else appears onerous, unusual or out of the ordinary Acceptable (no requirement to advise Issuing Office): - Unexpired lease term ≥125 years on a new build flat or ≥250 years on a new build house - Starting Ground Rent ≤0.1% of the property value - Ground Rent review period >5 years - Ground Rent escalation ≤RPI * Where the Ground Rent escalation is linked to the value of the building, please provide the following: - How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? - The current valuation and Ground Rent for each unit - What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned? - What is the right of appeal? And is this a documented process within the lease? - Who bears the cost of the valuation (and appeal) process? - Confirmation the review period is not less than twenty years |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower. |
| 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 lawyers that we work with handle Grange Park 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.
In the wake of 6 months of lengthy negotiations with the landlord of her garden apartment in Grange Park, Gemma initiated the lease extension process as the eighty year deadline was rapidly approaching. The transaction was concluded in October 2010. The freeholder’s charges were negotiated to a tad over 600 GBP.
Dr Oscar Thomas took over the lease of a basement flat in Grange Park in April 2001. We are asked if we could approximate the price would likely be for a 90 year lease extension. Comparable residencies in Grange Park with a long lease were in the region of £246,800. The average amount of ground rent was £60 collected per annum. The lease concluded on 5 October 2069. Having 50 years left we approximated the premium to the freeholder to extend the lease to be within £44,700 and £51,600 not including costs.
An example of a Lease Extension case for a Grange Park flat is First Floor Flat 109 Lyndhurst Road in May 2010. Following a vesting order by Edmonton County Court on 29th October 2009 the Tribunal decided on a figure of £5,012 for a lease extension. This case affected 1 flat. The unexpired residue of the current lease was 81.79 years.