For anyone whose Silverdale flat is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension.
Leasehold properties in Silverdale with over one hundred years unexpired 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 property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a landlord in Silverdale,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Silverdale valuers.
Luca was the the leasehold proprietor of a studio flat in Silverdale on the market with a lease of a few days over 61 years outstanding. Luca on an informal basis contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luca to invoke his statutory right. Luca procured expert legal guidance and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
In 2009 we were contacted by Dr Ethan François who, having acquired a studio flat in Silverdale in August 2004. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparative residencies in Silverdale with an extended lease were valued around £235,200. The average amount of ground rent was £45 invoiced quarterly. The lease ran out on 3 August 2091. Given that there were 66 years remaining we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including legals.
Last Summer we were approach by Dr Omar Simon , who took over the lease of a ground floor flat in Silverdale in July 2009. The dilemma was if we could shed any light on how much (approximately) price could be to extend the lease by ninety years. Similar homes in Silverdale with an extended lease were in the region of £275,000. The average amount of ground rent was £55 invoiced annually. The lease end date was in 2102. Given that there were 77 years as a residual term we approximated the premium to the landlord to extend the lease to be between £13,300 and £15,400 plus expenses.