Lancaster leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Most owners of residential leasehold property in Lancaster enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Lancaster you should investigate if your lease has between 70 and ninety years remaining. There are good reasons why a Lancaster leaseholder with a lease having around 80 years remaining should take action to ensure that a lease extension is actioned without delay
Leasehold properties in Lancaster with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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. |
The conveyancers that we work with handle Lancaster 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 conveyancer we work with provide it.
Oliver was the the leasehold owner of a conversion apartment in Lancaster being marketed with a lease of just over fifty eight years outstanding. Oliver on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 yearly. No ground rent would be payable on a lease extension were Oliver to exercise his statutory right. Oliver obtained expert advice and secured an acceptable deal informally and readily saleable.
In 2009 we were approached by Ms Hollie López who, having purchased a one bedroom apartment in Lancaster in August 1999. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by a further 90 years. Comparable residencies in Lancaster with 100 year plus lease were worth £280,000. The mid-range ground rent payable was £45 billed every twelve months. The lease end date was in 2094. Taking into account 69 years unexpired we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus legals.
Mr Callum Khan bought a purpose-built apartment in Lancaster in August 1997. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Comparative properties in Lancaster with a long lease were valued about £216,000. The mid-range amount of ground rent was £60 collected every twelve months. The lease lapsed in 2083. Given that there were 58 years left we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 plus professional charges.