Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Redland. Inevitably, the period of lease left reduces over time. This is often overlooked and only becomes a problem when the residence has to be disposed of or refinanced. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension. Qualifying leaseholders in Redland have the legal entitlement to extend the lease for a further ninety years under statute. Do give careful deliberation before delaying your Redland lease extension. Putting off the cost now likely increases the price you will ultimately have to pay to extend your lease
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as 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. |
| 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; |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Redland,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Redland valuers.
14 months ago Matthew, came dangerously close to the eighty-year threshold with the lease on his first floor apartment in Redland. Having purchased his flat two decades ago, the lease term was of little relevance. Luckily, he realised he would imminently be paying an escalated premium for a lease extension. Matthew extended the lease just under the wire last August. Matthew and the landlord who owned the flat above subsequently settled on a premium of £5,500 . If he had missed the deadline, the sum would have become more costly by at least £850.
Last year we were e-mailed by Mr and Mrs. O Ward , who took over the lease of a one bedroom flat in Redland in April 2002. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by 90 years. Similar homes in Redland with an extended lease were in the region of £168,800. The average amount of ground rent was £60 collected every twelve months. The lease termination date was on 15 January 2080. Considering the 55 years remaining we approximated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of fees.
In 2012 we were approached by Dr S Pérez who, having purchased a purpose-built flat in Redland in May 2010. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Similar flats in Redland with a long lease were in the region of £235,200. The mid-range amount of ground rent was £45 billed per annum. The lease concluded in 2091. Taking into account 66 years outstanding we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.