Long Eaton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Long Eaton tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Long Eaton you should investigate if your lease has between 70 and 90 years remaining. There are good reasons why a Long Eaton leaseholder with a lease having around eighty years remaining should take steps to ensure that a lease extension is put in place without delay
It is generally considered that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Long Eaton 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.
16 months ago Gabriel, started to get near to the 80-year mark with the lease on his first floor apartment in Long Eaton. In buying his home twenty years previously, the length of the lease was of no concern. Fortunately, he recognised he would imminently be paying way over the odds for a lease extension. Gabriel arranged for a lease extension at the eleventh hour last September. Gabriel and the landlord who owned the flat above eventually agreed on an amount of £5,000 . If the lease had gone to less than eighty years, the sum would have become more exhorbitant by at least £1,000.
Last Autumn we were e-mailed by Mr and Mrs. J Murphy , who bought a garden apartment in Long Eaton in July 1998. The question was if we could approximate the premium would likely be to extend the lease by ninety years. Comparative flats in Long Eaton with an extended lease were worth £216,000. The average amount of ground rent was £60 invoiced monthly. The lease came to a finish in 2083. Taking into account 58 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 not including costs.
In 2010 we were contacted by Mr and Mrs. V Mitchell who, having took over the lease of a ground floor apartment in Long Eaton in August 2005. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Comparative properties in Long Eaton with a long lease were in the region of £200,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease finished in 2103. Considering the 78 years left we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.