Unfortunately that a Sprotbrough residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Sprotbrough property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Sprotbrough will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Sprotbrough with over one hundred 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 property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
The conveyancing solicitors that we work with handle Sprotbrough 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.
After lengthy correspondence with the landlord of her basement apartment in Sprotbrough, Lucy initiated the lease extension process as the eighty year mark was rapidly nearing. The legal work was finalised in August 2011. The freeholder’s fees were kept to an absolute minimum.
Last Christmas we were called by Ms G David , who took over the lease of a purpose-built apartment in Sprotbrough in May 2011. We are asked if we could approximate the premium would likely be to extend the lease by ninety years. Comparative premises in Sprotbrough with a long lease were in the region of £248,000. The mid-range ground rent payable was £65 billed per annum. The lease termination date was in 2088. Having 63 years remaining we estimated the premium to the landlord for the lease extension to be between £20,000 and £23,000 not including fees.
Last Summer we were called by Dr P François , who took over the lease of a one bedroom apartment in Sprotbrough in February 2007. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Comparable flats in Sprotbrough with an extended lease were valued about £181,600. The average amount of ground rent was £55 billed quarterly. The lease ended in 2077. Given that there were 52 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 plus costs.