Northam 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 gets more expensive. It is the case that most Northam tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Northam you should see if your lease has between 70 and ninety years left. There are compelling reasons why a Northam flat owner with a lease having around eighty years remaining should take action to make sure that a lease extension is effected without delay
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises 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; |
| 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 | 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. |
| 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 |
Using our service will provide you increased control over the value of your Northam leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Ben, came perilously near to the eighty-year mark with the lease on his one bedroom flat in Northam. In buying his property twenty years ago, the lease term was of no bearing. Fortunately, he realised he would imminently be paying an inflated amount for a lease extension. Ben arranged for a lease extension just under the wire last May. Ben and the freeholder via the managing agents subsequently settled on the final figure of £6,000 . If he not met the deadline, the sum would have escalated by at least £1,125.
Last Autumn we were contacted by Dr George Lefèvre , who acquired a one bedroom flat in Northam in February 1999. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year extension to my lease. Identical premises in Northam with an extended lease were in the region of £265,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease concluded on 10 September 2099. Taking into account 73 years unexpired we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus expenses.
Last July we were e-mailed by Dr Alex Collins , who acquired a one bedroom flat in Northam in January 2009. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by an additional years. Identical residencies in Northam with a long lease were in the region of £264,000. The mid-range ground rent payable was £60 invoiced per annum. The lease ran out in 2079. Given that there were 53 years outstanding we approximated the compensation to the landlord for the lease extension to be within £37,100 and £42,800 exclusive of costs.