Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Sherston. Inevitably, the length of lease left reduces as time goes by. This is often overlooked and only raises itself as an issue when the residence needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to extend the lease. Qualifying leaseholders in Sherston have the legal entitlement to extend the lease for an additional 90 years under legislation. Do give due consideration before delaying your Sherston lease extension. Holding off that expense now simply increases the price you will eventually have to pay to extend your lease
It is generally accepted that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Sherston 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.
Subsequent to protracted negotiations with the landlord of her first floor apartment in Sherston, Anna initiated the lease extension process as the eighty year threshold was quickly nearing. The transaction completed in August 2006. The landlord’s charges were negotiated to about 500 pounds.
Last Spring we were e-mailed by Mrs W Kelly , who moved into a recently refurbished flat in Sherston in January 1997. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Comparable flats in Sherston with 100 year plus lease were valued about £260,000. The mid-range ground rent payable was £50 invoiced yearly. The lease termination date was on 21 January 2099. Considering the 73 years remaining we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus expenses.
Dr Harry Ricardo bought a ground floor flat in Sherston in April 2001. The question was if we could shed any light on how much (approximately) premium could be to prolong the lease by ninety years. Comparative properties in Sherston with 100 year plus lease were worth £264,000. The average ground rent payable was £60 collected every twelve months. The lease elapsed on 18 January 2079. Given that there were 53 years outstanding we estimated the premium to the freeholder to extend the lease to be within £37,100 and £42,800 plus legals.