On the balance of probabilities where you own a flat in Pershore you actually own a long leasehold interest over your property
Leasehold properties in Pershore with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 conveyancers that we work with handle Pershore 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.
In recent months Dylan, started to get close to the 80-year threshold with the lease on his studio flat in Pershore. In buying his flat two decades ago, the lease term was of little interest. Thankfully, he became aware that he would imminently be paying an escalated premium for a lease extension. Dylan extended the lease just in the nick of time last April. Dylan and the landlord subsequently agreed on a premium of £6,000 . If the lease had dipped lower than eighty years, the amount would have escalated by at least £975.
Mr and Mrs. K Taylor completed a recently refurbished flat in Pershore in May 2010. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparable homes in Pershore with a long lease were worth £280,000. The average amount of ground rent was £55 invoiced annually. The lease came to a finish on 1 October 2105. Given that there were 79 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of fees.
In 2009 we were e-mailed by Mr and Mrs. P Rogers who, having completed a first floor flat in Pershore in January 1998. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparative residencies in Pershore with a long lease were valued around £193,400. The average amount of ground rent was £65 invoiced quarterly. The lease finished on 2 February 2085. Considering the 59 years remaining we approximated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 not including costs.