Spondon leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Spondon residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Spondon you must check if your lease has between 70 and ninety years remaining. There are good reasons why a Spondon leaseholder with a lease having around eighty years left should take action to make sure that a lease extension is put in place without delay
Leasehold premises in Spondon with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Spondon,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Spondon valuers.
Off the back of lengthy negotiations with the freeholder of her one bedroom flat in Spondon, Georgia started the lease extension process just as the lease was nearing the critical 80-year threshold. The lease extension was concluded in June 2008. The freeholder’s costs were restricted to below 700 pounds.
In 2011 we were called by Dr I Thompson who, having bought a garden apartment in Spondon in February 2009. We are asked if we could approximate the premium would be for a ninety year lease extension. Similar homes in Spondon with a long lease were worth £227,800. The average ground rent payable was £45 collected every twelve months. The lease terminated in 2091. Considering the 65 years outstanding we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus fees.
Mrs I François took over the lease of a basement apartment in Spondon in September 2007. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar properties in Spondon with 100 year plus lease were valued about £270,000. The average amount of ground rent was £55 collected yearly. The lease concluded in 2102. Considering the 76 years outstanding we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus legals.