For anyone whose Spalding flat is held on a long lease, our message is clear – if nothing is done, the property will ultimately 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 extend the lease.
Leasehold residencies in Spalding 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 premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Spalding,the lease extension experts 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 Spalding valuers.
Andrew owned a high value apartment in Spalding on the market with a lease of a few days over 72 years remaining. Andrew on an informal basis contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
In 2013 we were approached by Dr B Bailey who, having bought a studio flat in Spalding in January 1996. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Similar premises in Spalding with a long lease were worth £295,000. The mid-range ground rent payable was £50 collected yearly. The lease ended in 2100. Considering the 75 years remaining we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus costs.
In 2014 we were contacted by Ms E Kelly who, having purchased a basement flat in Spalding in January 2003. The question was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Comparable flats in Spalding with an extended lease were in the region of £250,400. The average amount of ground rent was £65 invoiced every twelve months. The lease finished on 25 November 2089. Given that there were 64 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 not including expenses.