Lutterworth residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
Leasehold premises in Lutterworth with more than one hundred years outstanding 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 situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Lutterworth 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.
Aiden owned a high value apartment in Lutterworth being sold with a lease of a few days over 61 years unexpired. Aiden on an informal basis spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Aiden to exercise his statutory right. Aiden procured expert legal guidance and secured satisfactory deal informally and readily saleable.
Last Summer we were phoned by Mr and Mrs. V Brooks , who was assigned a lease of a purpose-built flat in Lutterworth in July 2004. The dilemma was if we could estimate the premium would likely be to extend the lease by ninety years. Similar properties in Lutterworth with an extended lease were in the region of £208,200. The average amount of ground rent was £65 collected per annum. The lease ended in 2087. Having 61 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £19,000 and £22,000 not including legals.
In 2011 we were e-mailed by Mr and Mrs. N Green who, having took over the lease of a basement flat in Lutterworth in June 2000. We are asked if we could estimate the price could be to extend the lease by ninety years. Similar properties in Lutterworth with a long lease were worth £260,000. The average ground rent payable was £50 invoiced monthly. The lease ended in 2098. Having 72 years outstanding we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.