For those whose Longford property is held on a long lease, our message is clear – if nothing is done, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
Leasehold residencies in Longford with over 100 years outstanding 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit 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. |
| 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. |
Lease extensions in Longford can be a difficult process. We recommend you obtain guidance from a lawyer and surveyor with experience in this area.
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 a wealth of experience procuring Longford lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Charlie owned a 2 bedroom apartment in Longford being marketed with a lease of a little over 61 years remaining. Charlie informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Charlie to exercise his statutory right. Charlie obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Mr G Díaz bought a one bedroom flat in Longford in February 2010. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical flats in Longford with a long lease were worth £183,600. The average amount of ground rent was £65 collected per annum. The lease came to a finish on 21 January 2082. Having 57 years remaining we approximated the premium to the landlord to extend the lease to be between £28,500 and £33,000 plus professional charges.
An example of a Freehold Enfranchisement decision for a Longford residence is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case was in relation to 2 flats. The unexpired term was 69 years.