Owning a flat usually means owning a lease of the property, which has a finite term of years. your lease will usually be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Sneinton. Clearly, the length of lease left shortens as time goes by. This is often ignored and only becomes a problem when the property has to be sold or refinanced. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension. Qualifying leaseholders in Sneinton have the right to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. You should give careful consideration before delaying your Sneinton lease extension. Holding off the cost now simply increases the price you will ultimately incur to extend your lease
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Sneinton,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 experience and the close ties they enjoy with Sneinton valuers.
Last year Alexander, came very near to the eighty-year mark with the lease on his purpose- built flat in Sneinton. Having purchased his flat two decades ago, the length of the lease was of no bearing. Thankfully, he noticed he would imminently be paying way over the odds for Extending the lease. Alexander arranged for a lease extension at the eleventh hour in August. Alexander and the freeholder via the management company in the end settled on the final figure of £5,000 . If he failed to meet the deadline, the figure would have escalated by at least £1,000.
In 2011 we were called by Mr Lewis Garcia who, having took over the lease of a recently refurbished flat in Sneinton in April 2003. The dilemma was if we could approximate the price could be to prolong the lease by an additional years. Comparative residencies in Sneinton with an extended lease were worth £200,000. The mid-range ground rent payable was £50 billed monthly. The lease finished in 2102. Given that there were 77 years remaining we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of expenses.
Mr A Bonnet purchased a studio flat in Sneinton in April 2006. The question was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparative premises in Sneinton with a long lease were worth £260,200. The mid-range amount of ground rent was £65 invoiced yearly. The lease elapsed on 12 January 2091. Having 66 years remaining we approximated the compensation to the freeholder for the lease extension to be within £16,200 and £18,600 exclusive of fees.