Southam leases on domestic properties are gradually losing value. Where your lease has about ninety years remaining, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for a lease extension to be in place before the term of the current lease dips below eighty years - otherwise a higher premium will be payable. Leasehold owners in Southam will mostly qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check if you qualify. In some situations you may not qualify. There are prescribed timetables and formalities to comply with once the process has commenced so it’s prudent to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Southam 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 conveyancer we work with provide it.
Trailing protracted discussions with the freeholder of her studio flat in Southam, Bethany initiated the lease extension process as the eighty year mark was quickly advancing. The lease extension completed in March 2007. The landlord’s costs were restricted to slightly above six hundred pounds.
Last Summer we were approach by Dr Benjamin Campbell , who was assigned a lease of a first floor apartment in Southam in September 2010. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Similar residencies in Southam with a long lease were worth £246,800. The average ground rent payable was £60 collected annually. The lease ran out on 9 October 2076. Considering the 50 years outstanding we approximated the premium to the landlord for the lease extension to be within £44,700 and £51,600 exclusive of costs.
Dr Jamie James acquired a studio flat in Southam in October 2012. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical properties in Southam with an extended lease were valued about £208,200. The average amount of ground rent was £65 billed monthly. The lease elapsed in 2087. Having 61 years unexpired we estimated the premium to the landlord for the lease extension to be within £20,000 and £23,000 exclusive of fees.