Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Par. Inevitably, the term of lease remaining shortens as time goes by. This may pass by relatively unnoticed when the residence needs to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension. Eligible long lease owners in Par have the legal entitlement to extend the lease for a further 90 years under legislation. You should give due consideration before putting off your Par lease extension. Holding off the cost now only increases the price you will ultimately have to pay for a lease extension
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your Par leasehold, as your property will be more valuable and marketable in terms of 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.
Off the back of protracted correspondence with the freeholder of her first floor apartment in Par, Isabella commenced the lease extension process as the 80 year deadline was fast advancing. The legal work was finalised in November 2009. The landlord’s costs were kept to an absolute minimum.
Dr M Hernández acquired a one bedroom flat in Par in November 1999. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Comparable properties in Par with a long lease were valued around £255,000. The average amount of ground rent was £50 collected quarterly. The lease ended in 2097. Considering the 71 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including professional charges.
Last month we were contacted by Mrs Maisie Rogers , who bought a garden flat in Par in April 2009. The question was if we could estimate the premium would likely be to prolong the lease by an additional years. Comparable properties in Par with a long lease were in the region of £254,200. The average ground rent payable was £60 billed per annum. The lease termination date was in 2077. Taking into account 51 years remaining we approximated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 exclusive of costs.