For those whose Great Missenden home is held on a long lease, our message is clear – if you do nothing, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| 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 conveyancing solicitors that we work with handle Great Missenden 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.
Trailing protracted discussions with the landlord of her leasehold flat in Great Missenden, Abbie started the lease extension process as the eighty year mark was rapidly approaching. The lease extension completed in July 2009. The landlord’s charges were kept to an absolute minimum.
In 2012 we were approached by Mr G Bailey who, having owned a one bedroom flat in Great Missenden in February 2006. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparative residencies in Great Missenden with 100 year plus lease were in the region of £254,200. The mid-range ground rent payable was £60 invoiced quarterly. The lease ended on 11 January 2077. Considering the 51 years remaining we calculated the premium to the landlord to extend the lease to be within £43,700 and £50,600 plus legals.
Mrs Alisha Reed bought a ground floor flat in Great Missenden in March 1996. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparable properties in Great Missenden with 100 year plus lease were valued around £210,600. The average ground rent payable was £45 collected per annum. The lease concluded on 5 January 2088. Taking into account 62 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £18,100 and £20,800 exclusive of legals.