If you are facing a significant premium because your lease in Great Missenden has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to commence your Great Missenden lease extension today:
A Great Missenden leasehold property depreciates with the years remaining on the lease.
When it comes to long leasehold property in Great Missenden, you are actually buying a right to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably when there are less than eighty years remaining. Residents in Great Missenden with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. When a lease has under 80 years outstanding, under the relevant legislation the freeholder can calculate and charge a greater premium, assessed on a technical computation, known as “marriage value” which is due.
Great Missenden property with a lease extension has roughly the same value as a freehold
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
Mortgage lenders will not finance a property with a short lease
Mortgage Lenders differ in their lending criteria. Some set the bar at seventy five years left on the lease; others may be prepared to lend with anything in excess seventy years. With less than sixty years, it may be challenging to get a mortgage in the first place.
| 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.
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| 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.
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| 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 Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 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 greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% 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 greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% 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 greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* 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
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| Royal Bank of Scotland |
Mortgage term plus 30 years.
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What makes us experts in Great Missenden lease extensions?
Regardless of whether you are a tenant or a freeholder in Great Missenden,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Great Missenden valuers.
Great Missenden Lease Extension Example Cases:
Evan, Great Missenden, Buckinghamshire
Last year Evan, came dangerously close to the eighty-year threshold with the lease on his first floor flat in Great Missenden. Having bought his home 18 years previously, the lease term was of little interest. As luck would have it, it dawned on him that he would imminently be paying way over the odds for a lease extension. Evan was able to extend his lease at the eleventh hour in June. Evan and the freeholder subsequently agreed on sum of £5,000 . If the lease had fallen to less than eighty years, the sum would have gone up by at least £950.
Great Missenden case:
Last year we were approach by Mr and Mrs. F Díaz , who
was assigned a lease of a garden flat in Great Missenden in February 2002. The dilemma was if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Identical properties in Great Missenden with a long lease were in the region of £246,800. The mid-range amount of ground rent was £60 billed every twelve months. The lease ended on 4 September 2076. Given that there were 50 years left we estimated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 plus fees.
Great Missenden case:
In 2014 we were called by Mr and Mrs. Y Morel who, having moved into a newly refurbished flat in Great Missenden in February 2007. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparable homes in Great Missenden with an extended lease were worth £203,200. The average amount of ground rent was £65 collected per annum. The lease ran out on 8 January 2087. Considering the 61 years left we approximated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 exclusive of legals.