Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Pickering. Inevitably, the period of lease remaining shortens as time goes by. This may pass by relatively unnoticed when the flat or house has to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Qualifying long lease owners in Pickering have the right to extend the lease for a further 90 years in accordance with statute. Do give careful attention before delaying your Pickering lease extension. Holding off that expense now only increases the price you will eventually incur for a lease extension
It is generally considered that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
Retaining our service will provide you better control over the value of your Pickering leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Daniel owned a high value apartment in Pickering on the market with a lease of a few days over fifty eight years outstanding. Daniel informally approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £200 yearly. No ground rent would be payable on a lease extension were Daniel to invoke his statutory right. Daniel obtained expert advice and secured an acceptable resolution without resorting to tribunal and readily saleable.
Last month we were e-mailed by Mr and Mrs. V Rivera , who acquired a first floor flat in Pickering in May 2001. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative residencies in Pickering with 100 year plus lease were valued about £191,000. The average ground rent payable was £65 billed per annum. The lease elapsed in 2084. Having 58 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £23,800 and £27,400 plus professional charges.
Dr R Gray owned a studio flat in Pickering in July 2012. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Comparable homes in Pickering with a long lease were in the region of £250,000. The mid-range amount of ground rent was £50 billed per annum. The lease expired in 2095. Having 69 years outstanding we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including fees.