Reading leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Most owners of residential leasehold property in Reading enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Reading you would be well advised to investigate if your lease has between 70 and ninety years left. There are good reasons why a Reading leaseholder with a lease having around 80 years remaining should take steps to make sure that a lease extension is put in place without delay
It is generally accepted that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
The lawyers that we work with undertake Reading 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 conveyancing solicitor we work with provide it.
Last October Eliot, came very close to the eighty-year threshold with the lease on his ground floor flat in Reading. Having bought his property twenty years ago, the unexpired term was of no significance. As luck would have it, it dawned on him that he would soon be paying an inflated amount for a lease extension. Eliot was able to extend his lease at the eleventh hour last August. Eliot and the freeholder subsequently agreed on sum of £5,000 . If the lease had slipped below eighty years, the figure would have increased by at least £900.
Mr P White purchased a one bedroom flat in Reading in July 2004. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparative properties in Reading with 100 year plus lease were valued around £275,000. The average ground rent payable was £65 collected every twelve months. The lease end date was in 2093. Taking into account 68 years remaining we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including costs.
Mr O Thompson owned a first floor flat in Reading in February 2001. The question was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Identical homes in Reading with 100 year plus lease were in the region of £208,600. The mid-range ground rent payable was £60 collected yearly. The lease end date was on 26 April 2082. Having 57 years unexpired we calculated the premium to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of expenses.