Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Ravensthorpe. Inevitably, the length of lease left shortens as time goes by. This is often ignored and only becomes a problem when the flat or house needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible leaseholders in Ravensthorpe have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Do give careful deliberation before delaying your Ravensthorpe lease extension. Putting off the cost now likely increases the price you will eventually have to pay to extend your lease
Leasehold residencies in Ravensthorpe with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service will provide you better control over the value of your Ravensthorpe leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Lewis, started to get close to the eighty-year threshold with the lease on his studio flat in Ravensthorpe. In buying his home 19 years ago, the unexpired term was of little bearing. Luckily, he noticed he needed to take action soon on a lease extension. Lewis arranged for a lease extension at the eleventh hour last January. Lewis and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If the lease had slid to less than eighty years, the price would have become more costly by at least £950.
Mr and Mrs. S Wood was assigned a lease of a purpose-built flat in Ravensthorpe in October 2009. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by an additional years. Similar homes in Ravensthorpe with 100 year plus lease were in the region of £191,400. The average amount of ground rent was £55 billed annually. The lease came to a finish in 2079. Given that there were 54 years as a residual term we calculated the premium to the landlord to extend the lease to be between £34,200 and £39,600 not including fees.
Mr and Mrs. G Lewis owned a studio apartment in Ravensthorpe in January 1996. The question was if we could estimate the premium would be to prolong the lease by ninety years. Comparable flats in Ravensthorpe with a long lease were valued about £295,000. The mid-range amount of ground rent was £45 collected yearly. The lease expiry date was on 3 October 2099. Having 74 years left we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including legals.