The only way is down when it comes to Reading lease terms. Reading properties that have a remaining term less than than eighty years will reduce in value even faster, and the cost to extend your lease will rise.
Leasehold premises in Reading with in excess of 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 situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Reading can be a difficult process. We recommend you get guidance from a conveyancing solicitor 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 procuring Reading lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Reuben, started to get close to the 80-year threshold with the lease on his leasehold apartment in Reading. Having purchased his property 18 years ago, the unexpired term was of minimal significance. As luck would have it, he noticed he needed to take action soon on Extending the lease. Reuben arranged for a lease extension just under the wire in June. Reuben and the landlord subsequently agreed on an amount of £5,500 . If he not met the deadline, the premium would have increased by at least £875.
Last Autumn we were approach by Mr Eli Miller , who owned a purpose-built flat in Reading in October 1995. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable flats in Reading with 100 year plus lease were worth £295,000. The mid-range ground rent payable was £45 billed monthly. The lease terminated in 2099. Considering the 75 years unexpired we approximated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus costs.
In 2011 we were approached by Ms Zoe Martinez who, having took over the lease of a garden apartment in Reading in September 2002. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by 90 years. Comparable homes in Reading with 100 year plus lease were in the region of £250,400. The average ground rent payable was £65 collected yearly. The lease came to a finish on 17 August 2088. Given that there were 64 years left we calculated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 not including legals.