Lanchester leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Lanchester tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Lanchester you must see if your lease has between 70 and ninety years remaining. There are compelling reasons why a Lanchester leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is put in place without delay
Leasehold properties in Lanchester with in excess of one hundred 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 property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Lanchester 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.
Half a year ago Aarav, started to get near to the eighty-year threshold with the lease on his leasehold flat in Lanchester. Having purchased his property 18 years previously, the unexpired term was of little importance. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Aarav extended the lease just ahead of time last April. Aarav and the freeholder ultimately agreed on an amount of £5,000 . If he had missed the deadline, the figure would have increased by a minimum £1,125.
In 2012 we were approached by Dr Teddy Martinez who, having acquired a newly refurbished apartment in Lanchester in June 2005. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative properties in Lanchester with an extended lease were worth £285,000. The mid-range ground rent payable was £55 collected quarterly. The lease terminated in 2104. Having 79 years left we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including professional charges.
Last Winter we were phoned by Ms P Jones , who took over the lease of a studio apartment in Lanchester in June 1997. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year lease extension. Comparative homes in Lanchester with 100 year plus lease were valued around £193,400. The average ground rent payable was £65 invoiced quarterly. The lease expired on 7 September 2084. Taking into account 59 years left we approximated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 not including expenses.