On the balance of probabilities if you own a flat in Paddock Wood you actually own a long leasehold interest over your property
It is conventional wisdom that a property with in excess of 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 35 years left, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| 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. |
| Yorkshire 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. |
The lawyers that we work with handle Paddock Wood 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 conveyancing solicitor we work with provide it.
Alexander was the the leasehold owner of a studio apartment in Paddock Wood being marketed with a lease of fraction over 61 years left. Alexander informally approached his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Alexander to exercise his statutory right. Alexander obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Dr R Kelly bought a one bedroom flat in Paddock Wood in May 2009. The question was if we could approximate the price would likely be to extend the lease by 90 years. Identical homes in Paddock Wood with 100 year plus lease were worth £245,000. The average ground rent payable was £50 invoiced annually. The lease finished on 1 March 2094. Taking into account 68 years left we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.
Mr and Mrs. J Patel completed a first floor apartment in Paddock Wood in March 2010. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by ninety years. Comparative premises in Paddock Wood with 100 year plus lease were worth £285,000. The average amount of ground rent was £55 billed annually. The lease expired on 1 August 2105. Considering the 79 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of fees.