Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Silsoe. Clearly, the length of lease left reduces over time. This may slip by relatively unnoticed when the property needs to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Qualifying long lease owners in Silsoe have the legal entitlement to extend the lease for an additional ninety years in accordance with statute. Please give careful attention before putting off your Silsoe lease extension. Holding off the cost now likely increases the price you will eventually incur for a lease extension
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 90 years added to all but the shortest lease, the premises will be equivalent in value to 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. |
| 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. |
| 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. |
| 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. |
| 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 conveyancers that we work with handle Silsoe 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.
In 2014 Henry, started to get close to the eighty-year threshold with the lease on his garden apartment in Silsoe. In buying his property two decades ago, the unexpired term was of little bearing. Thankfully, it dawned on him that he would soon be paying way over the odds for a lease extension. Henry extended the lease at the eleventh hour last September. Henry and the freeholder eventually settled on the final figure of £5,500 . If he failed to meet the deadline, the sum would have gone up by a minimum £1,075.
In 2014 we were phoned by Mr and Mrs. H Lefèvre who, having bought a ground floor flat in Silsoe in June 2006. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparative premises in Silsoe with a long lease were worth £200,000. The average ground rent payable was £50 billed monthly. The lease ran out on 4 August 2103. Given that there were 77 years remaining we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus expenses.
In 2010 we were called by Mr and Mrs. H Murphy who, having completed a purpose-built flat in Silsoe in June 1996. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Identical residencies in Silsoe with 100 year plus lease were valued about £260,200. The mid-range amount of ground rent was £65 collected quarterly. The lease lapsed in 2092. Taking into account 66 years remaining we approximated the premium to the landlord to extend the lease to be within £15,200 and £17,600 plus expenses.