Potton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Potton residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Potton you should investigate if your lease has between 70 and ninety years left. There are good reasons why a Potton leaseholder with a lease having around 80 years unexpired should take action to ensure that a lease extension is actioned without delay
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
| 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 30 years plus the term of the mortgage at the outset of the mortgage. |
Lease extensions in Potton can be a difficult process. We recommend you get guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Potton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Aiden, started to get close to the 80-year mark with the lease on his ground floor apartment in Potton. Having bought his flat two decades ago, the length of the lease was of no concern. Luckily, he recognised he needed to take steps soon on Extending the lease. Aiden was able to extend his lease just in the nick of time in April. Aiden and the freeholder via the managing agents in the end agreed on a premium of £5,000 . If the lease had slid below eighty years, the price would have become more exhorbitant by at least £975.
Last January we were approach by Ms R Nelson , who bought a studio flat in Potton in January 2003. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Comparative properties in Potton with 100 year plus lease were valued around £198,800. The mid-range ground rent payable was £55 collected annually. The lease concluded on 25 September 2081. Taking into account 55 years unexpired we approximated the premium to the landlord to extend the lease to be between £33,300 and £38,400 exclusive of fees.
Last July we were contacted by Dr S Rodríguez , who completed a studio flat in Potton in September 2002. We are asked if we could approximate the price would be for a 90 year lease extension. Similar homes in Potton with an extended lease were valued about £300,000. The mid-range ground rent payable was £50 billed per annum. The lease lapsed in 2101. Having 75 years outstanding we approximated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of costs.