Owning a flat usually means owning a lease of the property, which has a finite term of years. your lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Idle. Inevitably, the period of lease left shortens as time goes by. This may slip by relatively unnoticed when the residence needs to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Qualifying long lease owners in Idle have the right to extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. You should give due consideration before delaying your Idle lease extension. Holding off that expense now only increases the price you will ultimately have to pay for a lease extension
Leasehold premises in Idle with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Idle,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Idle valuers.
Cameron owned a conversion apartment in Idle on the market with a lease of a few days over fifty eight years unexpired. Cameron on an informal basis contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Cameron to invoke his statutory right. Cameron obtained expert legal guidance and secured an acceptable resolution without going to tribunal and sell the flat.
Mr and Mrs. K Watson was assigned a lease of a studio flat in Idle in March 2011. The question was if we could approximate the premium could be to extend the lease by ninety years. Comparable premises in Idle with a long lease were worth £183,600. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease terminated in 2082. Given that there were 57 years as a residual term we calculated the premium to the landlord for the lease extension to be within £28,500 and £33,000 not including legals.
Mrs G Collins moved into a one bedroom apartment in Idle in January 2008. The dilemma was if we could approximate the premium would be for a 90 year lease extension. Similar premises in Idle with 100 year plus lease were in the region of £245,000. The mid-range ground rent payable was £50 invoiced monthly. The lease elapsed on 18 September 2093. Considering the 68 years left we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of legals.