Owning a apartment usually means owning a lease of the property, which has a set term of years. This lease will usually be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Leegomery. Clearly, the period of lease left reduces over time. This is often ignored and only becomes a problem when the property needs to be disposed of or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension. Eligible leaseholders in Leegomery have the legal entitlement to extend the lease for a further 90 years under the 1993 Leasehold Reform Act. You should give due attention before putting off your Leegomery lease extension. Holding off the cost now simply increases the price you will ultimately have to pay for a lease extension
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for decades to come.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Chelsea 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. |
| Godiva Mortgages | 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Using our service will provide you enhanced control over the value of your Leegomery leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted correspondence with the freeholder of her one bedroom flat in Leegomery, Holly started the lease extension process as the 80 year threshold was quickly coming. The legal work completed in November 2005. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. U Reed completed a purpose-built flat in Leegomery in May 2011. The question was if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Similar premises in Leegomery with a long lease were in the region of £265,000. The average amount of ground rent was £50 collected yearly. The lease finished on 26 June 2099. Taking into account 73 years remaining we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.
Last month we were called by Mr L Garcia , who took over the lease of a first floor apartment in Leegomery in September 2003. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Similar residencies in Leegomery with a long lease were valued around £264,000. The average amount of ground rent was £60 collected monthly. The lease ended on 22 June 2079. Given that there were 53 years left we approximated the premium to the landlord for the lease extension to be between £37,100 and £42,800 plus professional charges.