For those whose Silverton home is held on a long lease, the message is clear – if no remedial action is taken, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 landlord in Silverton,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 Silverton valuers.
Half a year ago Andrew, came seriously close to the 80-year threshold with the lease on his garden flat in Silverton. In buying his home 19 years ago, the unexpired term was of no bearing. As luck would have it, he became aware that he would soon be paying way over the odds for a lease extension. Andrew was able to extend his lease just under the wire in July. Andrew and the landlord who owned the flat above ultimately agreed on a premium of £5,500 . If the lease had dropped lower than eighty years, the price would have become more exhorbitant by at least £850.
In 2010 we were contacted by Mr and Mrs. N André who, having bought a one bedroom flat in Silverton in February 2003. We are asked if we could approximate the premium would likely be to prolong the lease by 90 years. Similar properties in Silverton with an extended lease were worth £191,400. The average amount of ground rent was £55 billed annually. The lease came to a finish in 2080. Having 54 years unexpired we estimated the compensation to the landlord for the lease extension to be between £34,200 and £39,600 plus costs.
In 2014 we were phoned by Dr Max Rogers who, having took over the lease of a ground floor apartment in Silverton in April 2001. We are asked if we could approximate the premium would be for a 90 year lease extension. Identical flats in Silverton with a long lease were in the region of £295,000. The average amount of ground rent was £45 invoiced yearly. The lease ran out in 2100. Given that there were 74 years remaining we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.