Unfortunately that a Oldland residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Oldland property market.Once your lease gets to 85ish years, you need to 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 below 80 years - otherwise a higher premium will be payable. The majority of flat owners in Oldland will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Oldland with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Using our service will provide you increased control over the value of your Oldland leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Blake owned a studio apartment in Oldland being sold with a lease of a little over sixty years unexpired. Blake informally contacted his freeholder a well known London-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Blake to invoke his statutory right. Blake procured expert legal guidance and secured an acceptable resolution informally and readily saleable.
Mr U Cox completed a basement flat in Oldland in August 2009. We are asked if we could approximate the price would be for a 90 year lease extension. Comparative residencies in Oldland with 100 year plus lease were in the region of £181,600. The average ground rent payable was £55 collected per annum. The lease terminated in 2077. Given that there were 52 years left we approximated the premium to the landlord for the lease extension to be between £30,400 and £35,200 plus expenses.
In 2012 we were called by Ms Sophia Ramírez who, having owned a one bedroom apartment in Oldland in September 2006. The question was if we could estimate the premium would be to prolong the lease by an additional years. Identical homes in Oldland with a long lease were valued about £285,000. The average amount of ground rent was £45 collected monthly. The lease concluded in 2097. Having 72 years left we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including costs.