The basic rule is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Langley have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. Do think carefully before delaying your Langley lease extension. Shelving the costs today simply escalates the premium you will ultimately have to pay to extend the lease.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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 Langley 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.
Owen owned a 2 bedroom flat in Langley on the market with a lease of a little over fifty eight years remaining. Owen on an informal basis approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Owen to invoke his statutory right. Owen obtained expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr and Mrs. J Girard owned a garden flat in Langley in February 2005. We are asked if we could estimate the price could be to prolong the lease by 90 years. Similar homes in Langley with 100 year plus lease were worth £171,800. The average amount of ground rent was £55 collected monthly. The lease ended in 2076. Given that there were 50 years unexpired we estimated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 not including fees.
An example of a Freehold Enfranchisement case for a Langley flat is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case related to 2 flats. The unexpired lease term was 69 years.