Unfortunately that a Longridge residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Longridge property market.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be payable. Most flat owners in Longridge will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
Leasehold properties in Longridge with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant 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. |
| Birmingham Midshires | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Longridge 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 year Owen, came perilously close to the eighty-year mark with the lease on his garden apartment in Longridge. Having purchased his flat two decades ago, the unexpired term was of no concern. by good luck, he became aware that he would imminently be paying an inflated amount for a lease extension. Owen extended the lease just ahead of time last January. Owen and the landlord subsequently settled on the final figure of £6,000 . If the lease had gone below eighty years, the price would have escalated by a minimum £900.
In 2009 we were called by Mr and Mrs. C Wilson who, having completed a one bedroom flat in Longridge in June 2000. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Comparative homes in Longridge with 100 year plus lease were worth £191,400. The average amount of ground rent was £55 invoiced every twelve months. The lease lapsed in 2080. Given that there were 54 years left we calculated the premium to the landlord to extend the lease to be between £34,200 and £39,600 not including expenses.
Mr U Lefèvre purchased a garden apartment in Longridge in July 2007. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Comparable flats in Longridge with a long lease were in the region of £295,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease ended on 23 February 2100. Considering the 74 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including costs.