Lower Earley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Lower Earley residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Lower Earley you should investigate if your lease has between 70 and 90 years left. There are good reasons why a Lower Earley flat owner with a lease having around eighty years left should take action to make sure that a lease extension is effected without delay
Leasehold properties in Lower Earley with in excess of 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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; |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Lower Earley can be a difficult process. We recommend you secure guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
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 in-depth market knowledge procuring Lower Earley lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Alex was the the leasehold proprietor of a 2 bedroom apartment in Lower Earley being marketed with a lease of just over fifty eight years unexpired. Alex informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Alex to exercise his statutory right. Alex obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2013 we were contacted by Mrs J Murphy who, having completed a newly refurbished flat in Lower Earley in September 2004. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Identical premises in Lower Earley with a long lease were valued about £174,200. The average ground rent payable was £55 collected yearly. The lease concluded on 20 May 2076. Having 51 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of legals.
Last February we were contacted by Ms Amelia James , who bought a basement flat in Lower Earley in April 2006. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Similar residencies in Lower Earley with 100 year plus lease were valued around £285,000. The average amount of ground rent was £45 collected annually. The lease expiry date was in 2096. Considering the 71 years outstanding we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.