Unfortunately that a Inkberrow residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Inkberrow property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher premium will be payable. Most flat owners in Inkberrow will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the process.
Leasehold residencies in Inkberrow with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| 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. |
| 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; |
| Chelsea 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. |
| Halifax | 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 conveyancing solicitors that we work with handle Inkberrow 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.
Evan was the the leasehold proprietor of a 2 bedroom flat in Inkberrow being marketed with a lease of a few days over 72 years remaining. Evan informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree 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 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Evan to invoke his statutory right. Evan obtained expert legal guidance and secured satisfactory resolution without going to tribunal and readily saleable.
In 2012 we were approached by Dr W James who, having owned a studio flat in Inkberrow in October 2000. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Similar properties in Inkberrow with 100 year plus lease were worth £256,600. The average ground rent payable was £60 collected yearly. The lease concluded in 2078. Given that there were 52 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £41,800 and £48,400 plus costs.
Dr P Collins owned a ground floor flat in Inkberrow in June 2004. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar premises in Inkberrow with a long lease were in the region of £215,600. The mid-range amount of ground rent was £45 collected annually. The lease came to a finish in 2088. Having 62 years remaining we approximated the premium to the landlord to extend the lease to be between £18,100 and £20,800 not including costs.