Owning a flat usually means owning a lease of the property, which has a set term of years. your lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in North End. Clearly, the term of lease left reduces over time. This may pass by relatively unnoticed when the residence needs to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible leaseholders in North End have the right to extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. Please give careful consideration before putting off your North End lease extension. Putting off that expense now simply increases the price you will ultimately have to pay for a lease extension
It is generally considered that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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. |
The lawyers that we work with undertake North End 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.
In recent months Oscar, came critically close to the 80-year mark with the lease on his basement apartment in North End. In buying his home two decades ago, the unexpired term was of no concern. by good luck, he recognised he would imminently be paying an inflated amount for Extending the lease. Oscar extended the lease just under the wire in June. Oscar and the landlord who owned the flat above ultimately settled on sum of £5,000 . If the lease had gone below eighty years, the premium would have gone up by a minimum £875.
In 2010 we were approached by Ms D Rivera who, having moved into a basement apartment in North End in May 2010. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparable properties in North End with an extended lease were valued around £193,400. The mid-range amount of ground rent was £65 collected every twelve months. The lease expired on 5 May 2085. Having 59 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 not including professional charges.
An example of a Lease Extension decision for a North End premises is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case affected 13 flats. The unexpired lease term was 76 years.