It’s a harsh certainty that a Old Swan residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Old Swan property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher amount will be due. The majority of flat owners in Old Swan will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you enhanced control over the value of your Old Swan leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last October Luke, started to get near to the eighty-year mark with the lease on his two bedroom flat in Old Swan. Having purchased his property two decades ago, the lease term was of little bearing. by good luck, he recognised he needed to take steps soon on a lease extension. Luke was able to extend his lease just ahead of time last March. Luke and the landlord who owned the flat above in the end settled on sum of £5,500 . If the lease had fallen lower than eighty years, the premium would have become more exhorbitant by a minimum £1,075.
Last Spring we were called by Dr Ibrahim Clark , who purchased a basement flat in Old Swan in February 2001. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Similar properties in Old Swan with an extended lease were worth £186,000. The mid-range ground rent payable was £65 collected every twelve months. The lease came to a finish in 2083. Given that there were 58 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £24,700 and £28,600 plus costs.
Last year we were e-mailed by Mr and Mrs. F Flores , who was assigned a lease of a purpose-built apartment in Old Swan in April 2008. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Identical premises in Old Swan with a long lease were worth £250,000. The average ground rent payable was £50 billed quarterly. The lease finished on 6 July 2094. Taking into account 69 years as a residual term we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.