For anyone whose Paulton home is held on a long lease, the message is clear – if you ignore the situation, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
Leasehold premises in Paulton with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancing solicitors that we work with handle Paulton 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 lawyer we work with provide it.
Eliot owned a studio flat in Paulton being marketed with a lease of a little over 59 years remaining. Eliot informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 yearly. No ground rent would be due on a lease extension were Eliot to invoke his statutory right. Eliot obtained expert advice and was able to make an informed decision and handle with the matter and readily saleable.
Dr Adam Brooks was assigned a lease of a one bedroom flat in Paulton in May 2001. The dilemma was if we could estimate the price would be for a 90 year lease extension. Comparable properties in Paulton with an extended lease were worth £265,000. The average ground rent payable was £50 collected yearly. The lease finished in 2099. Given that there were 73 years outstanding we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.
Last Christmas we were phoned by Mr Rory Pérez , who took over the lease of a one bedroom apartment in Paulton in October 2003. We are asked if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Similar residencies in Paulton with 100 year plus lease were worth £264,000. The average ground rent payable was £60 billed yearly. The lease ran out in 2079. Given that there were 53 years remaining we approximated the premium to the freeholder to extend the lease to be between £37,100 and £42,800 plus costs.