The rule of thumb is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Leyland have the right to extend the lease for a further 90 years under legislation. Please think carefully before delaying your Leyland lease extension. Shelving that expense today simply escalates the premium you will ultimately be required to pay to extend the lease.
Leasehold premises in Leyland with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Leyland can be a difficult process. We recommend you procure professional help from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Leyland lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ryan owned a conversion flat in Leyland being sold with a lease of just over 59 years unexpired. Ryan informally approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ryan to invoke his statutory right. Ryan procured expert advice and was able to make a more informed decision and deal with the matter and sell the property.
Mr and Mrs. W Parker owned a basement apartment in Leyland in January 2003. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Leyland with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 collected every twelve months. The lease lapsed in 2096. Given that there were 71 years outstanding we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including costs.
Last Christmas we were called by Mr and Mrs. F Edwards , who owned a purpose-built apartment in Leyland in November 2010. The dilemma was if we could approximate the price would be to prolong the lease by an additional years. Similar residencies in Leyland with a long lease were worth £225,800. The mid-range ground rent payable was £60 invoiced every twelve months. The lease expiry date was in 2085. Taking into account 60 years left we approximated the compensation to the landlord for the lease extension to be within £24,700 and £28,600 plus professional charges.