Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Ludgershall. Clearly, the period of lease left shortens as time goes by. This is often ignored and only becomes a problem when the property has to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Eligible leaseholders in Ludgershall have the legal entitlement to extend the lease for a further 90 years in accordance with statute. Please give due consideration before delaying your Ludgershall lease extension. Putting off that expense now simply increases the price you will ultimately incur to extend your lease
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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 lawyers that we work with undertake Ludgershall 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 conveyancer we work with provide it.
Gabriel owned a conversion apartment in Ludgershall being sold with a lease of just over sixty years outstanding. Gabriel on an informal basis contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. No ground rent would be payable on a lease extension were Gabriel to exercise his statutory right. Gabriel obtained expert legal guidance and was able to make an informed judgement and deal with the matter and sell the property.
Last Winter we were phoned by Mr and Mrs. F Mercier , who was assigned a lease of a purpose-built apartment in Ludgershall in July 2004. We are asked if we could approximate the premium would likely be to extend the lease by 90 years. Similar properties in Ludgershall with a long lease were worth £285,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease expired in 2106. Considering the 80 years outstanding we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus legals.
In 2011 we were phoned by Mr and Mrs. P Morel who, having bought a recently refurbished flat in Ludgershall in June 1999. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar properties in Ludgershall with an extended lease were worth £200,800. The average amount of ground rent was £65 collected every twelve months. The lease elapsed in 2086. Given that there were 60 years unexpired we calculated the premium to the freeholder for the lease extension to be between £20,900 and £24,200 plus costs.