For anyone whose Snettisham flat is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 conveyancing solicitors that we work with handle Snettisham 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 conveyancing solicitor we work with provide it.
Harvey owned a conversion flat in Snettisham being sold with a lease of just over sixty years unexpired. Harvey on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. 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 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harvey to exercise his statutory right. Harvey obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
In 2014 we were phoned by Mr A Johnson who, having took over the lease of a purpose-built flat in Snettisham in October 2001. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparative properties in Snettisham with 100 year plus lease were in the region of £198,800. The average ground rent payable was £55 collected per annum. The lease came to a finish on 23 June 2081. Considering the 55 years unexpired we approximated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including costs.
In 2012 we were called by Dr E Moreau who, having took over the lease of a first floor flat in Snettisham in September 2006. The question was if we could estimate the price could be for a ninety year extension to my lease. Identical homes in Snettisham with an extended lease were worth £295,000. The mid-range ground rent payable was £50 invoiced yearly. The lease ended in 2101. Taking into account 75 years outstanding we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including expenses.