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 set period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Potswood. Clearly, the period of lease remaining shortens over time. This may pass by relatively unnoticed when the property needs to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Qualifying leaseholders in Potswood have the right to extend the lease for an additional ninety years in accordance with Leasehold Reform legislation. Please give careful consideration before putting off your Potswood lease extension. Holding off the cost now only increases the price you will eventually incur for a lease extension
Leasehold residencies in Potswood with in excess of 100 years remaining on the lease are often regarded as a ‘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 upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
Using our service gives you enhanced control over the value of your Potswood leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Aaron owned a 2 bedroom apartment in Potswood being marketed with a lease of a little over sixty years left. Aaron on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 yearly. No ground rent would be payable on a lease extension were Aaron to invoke his statutory right. Aaron obtained expert advice and secured satisfactory deal informally and sell the flat.
Mr and Mrs. P Clark purchased a garden apartment in Potswood in July 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by an additional years. Similar premises in Potswood with 100 year plus lease were worth £166,400. The mid-range amount of ground rent was £60 invoiced monthly. The lease expiry date was on 26 November 2080. Given that there were 54 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £32,300 and £37,400 plus professional charges.
In 2013 we were phoned by Mr B Wood who, having purchased a studio flat in Potswood in October 2012. The question was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical properties in Potswood with a long lease were valued about £227,800. The mid-range amount of ground rent was £45 collected monthly. The lease came to a finish in 2091. Given that there were 65 years outstanding we calculated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including legals.