Unfortunately that a Langstone residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Langstone property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under eighty years - otherwise a higher premium will be payable. Most flat owners in Langstone will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold properties in Langstone with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Langstone,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Langstone valuers.
John owned a high value flat in Langstone on the market with a lease of just over sixty years unexpired. John informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be due on a lease extension were John to exercise his statutory right. John obtained expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
In 2013 we were approached by Mrs B Nguyen who, having purchased a one bedroom apartment in Langstone in November 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Comparable residencies in Langstone with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £55 invoiced annually. The lease terminated in 2102. Taking into account 76 years left we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.
Last month we were contacted by Dr Rory Petit , who acquired a garden flat in Langstone in October 2006. The question was if we could estimate the premium would likely be to extend the lease by ninety years. Comparative premises in Langstone with a long lease were worth £176,200. The average ground rent payable was £65 billed annually. The lease expiry date was on 7 June 2082. Considering the 56 years as a residual term we approximated the premium to the landlord to extend the lease to be between £29,500 and £34,000 plus expenses.