Chances are that where you own a flat in Lake District you actually own a long leasehold interest over your property
Leasehold residencies in Lake District 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 property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Lake District leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Kyle, started to get close to the 80-year threshold with the lease on his garden apartment in Lake District. Having purchased his home twenty years previously, the lease term was of little significance. Fortunately, he noticed he would imminently be paying an escalated premium for a lease extension. Kyle arranged for a lease extension at the eleventh hour last April. Kyle and the landlord who owned the flat above eventually agreed on sum of £5,500 . If the lease had gone lower than 80 years, the figure would have gone up by at least £925.
Last Winter we were phoned by Mr and Mrs. Y Bertrand , who took over the lease of a purpose-built apartment in Lake District in May 2006. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by ninety years. Identical premises in Lake District with a long lease were valued around £285,000. The mid-range amount of ground rent was £45 billed per annum. The lease came to a finish on 3 September 2097. Having 72 years outstanding we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including costs.
In 2014 we were e-mailed by Dr U Flores who, having completed a garden flat in Lake District in June 2000. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparative properties in Lake District with an extended lease were valued about £233,200. The average ground rent payable was £60 billed per annum. The lease came to a finish on 8 September 2086. Given that there were 61 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £22,800 and £26,400 plus professional charges.