Owning a apartment usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Reigate. Clearly, the term of lease remaining shortens as time goes by. This may slip by relatively unnoticed when the flat or house has to be sold or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Eligible long lease owners in Reigate have the right to extend the lease for a further 90 years in accordance with statute. Do give careful deliberation before putting off your Reigate lease extension. Holding off the cost now likely increases the price you will eventually incur to extend your lease
Leasehold premises in Reigate with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Godiva Mortgages | 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Reigate,the lease extension solicitors 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 Reigate valuers.
Off the back of lengthy negotiations with the freeholder of her two bedroom flat in Reigate, Alexandra initiated the lease extension process as the eighty year mark was fast advancing. The transaction completed in September 2006. The freeholder’s charges were kept to an absolute minimum.
Dr T Young acquired a ground floor apartment in Reigate in September 2010. The question was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable residencies in Reigate with an extended lease were worth £257,800. The average amount of ground rent was £65 billed quarterly. The lease lapsed in 2091. Taking into account 65 years unexpired we estimated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 plus costs.
In 2011 we were phoned by Dr A Hall who, having purchased a garden flat in Reigate in April 2002. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Comparative properties in Reigate with a long lease were in the region of £191,400. The average amount of ground rent was £55 collected quarterly. The lease came to a finish on 22 April 2080. Considering the 54 years remaining we calculated the premium to the freeholder for the lease extension to be within £34,200 and £39,600 exclusive of fees.