For those whose Longford flat is held on a long lease, our message is clear – if no remedial action is taken, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancers that we work with handle Longford 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 lawyer we work with provide it.
Last October Luke, came perilously near to the 80-year threshold with the lease on his basement apartment in Longford. Having bought his flat twenty years ago, the lease term was of minimal interest. Luckily, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Luke was able to extend his lease at the eleventh hour last September. Luke and the landlord who owned the flat above eventually settled on a premium of £6,000 . If he failed to meet the deadline, the amount would have escalated by at least £950.
In 2011 we were called by Mr and Mrs. E Jones who, having acquired a basement apartment in Longford in January 2011. 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 Longford with a long lease were in the region of £285,000. The mid-range amount of ground rent was £55 collected quarterly. The lease ran out in 2105. Considering the 79 years left we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of fees.
An example of a Freehold Enfranchisement decision for a Longford premises 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 remaining number of years on the lease was 69 years.