Chances are that where you own a flat in Redland you actually own a long leasehold interest over your property
Leasehold properties in Redland with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
The lawyers that we work with undertake Redland 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 lawyer we work with provide it.
Last October Edward, started to get near to the 80-year threshold with the lease on his basement flat in Redland. In buying his property twenty years previously, the length of the lease was of minimal relevance. Fortunately, he realised he needed to take action soon on a lease extension. Edward was able to extend his lease just ahead of time last April. Edward and the freeholder subsequently agreed on the final figure of £5,500 . If the lease had slipped lower than 80 years, the premium would have become more costly by at least £1,050.
Mr and Mrs. P Lewis moved into a one bedroom flat in Redland in July 2010. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable residencies in Redland with a long lease were valued around £242,600. The mid-range ground rent payable was £45 collected monthly. The lease ended in 2091. Having 67 years outstanding we approximated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 plus expenses.
In 2013 we were phoned by Mrs Y Ward who, having purchased a first floor apartment in Redland in November 2011. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by ninety years. Comparable residencies in Redland with 100 year plus lease were valued about £280,000. The average amount of ground rent was £55 billed monthly. The lease ran out in 2102. Given that there were 78 years outstanding we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of legals.