With a long leasehold premises in Lake District, you effectively rent it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive especially when there are less than 80 years remaining. Anyone in Lake District with a lease drawing near to 81 years unexpired should seriously think of extending it sooner than later. When a lease has below eighty years left, under the relevant legislation the freeholder can calculate and levy a greater amount, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold residencies in Lake District with more than 100 years remaining 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 premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Lake District 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 lawyer we work with provide it.
Jacob was the the leasehold proprietor of a 2 bedroom flat in Lake District on the market with a lease of a few days over 61 years outstanding. Jacob informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder 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 £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jacob to exercise his statutory right. Jacob procured expert advice and secured an acceptable deal without resorting to tribunal and sell the property.
In 2014 we were called by Mr Noah Johnson who, having moved into a one bedroom apartment in Lake District in June 2001. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Identical properties in Lake District with a long lease were in the region of £191,400. The mid-range ground rent payable was £55 collected yearly. The lease expired on 27 August 2080. Given that there were 54 years remaining we approximated the compensation to the freeholder to extend the lease to be within £34,200 and £39,600 exclusive of fees.
Last Spring we were phoned by Mrs Y Watson , who owned a ground floor apartment in Lake District in October 2005. The question was if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Comparable homes in Lake District with a long lease were valued around £295,000. The average amount of ground rent was £45 invoiced quarterly. The lease elapsed in 2100. Having 74 years unexpired we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus fees.