Longfield leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Longfield 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 Longfield you really ought to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Longfield with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| 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. |
Using our service gives you increased control over the value of your Longfield leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of unsuccessful correspondence with the landlord of her one bedroom apartment in Longfield, Maisie initiated the lease extension process as the 80 year mark was swiftly advancing. The legal work was concluded in January 2014. The landlord’s costs were kept to an absolute minimum.
Dr K Bernard bought a first floor flat in Longfield in February 2007. The question was if we could approximate the price could be for a 90 year lease extension. Similar premises in Longfield with an extended lease were worth £176,200. The average amount of ground rent was £65 billed yearly. The lease concluded in 2082. Given that there were 56 years outstanding we calculated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 not including professional charges.
Last Spring we were called by Dr P Phillips , who purchased a studio flat in Longfield in June 2007. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Similar properties in Longfield with an extended lease were valued about £237,600. The average ground rent payable was £45 invoiced yearly. The lease expired on 9 August 2093. Having 67 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 not including fees.