For those whose Standish flat is held on a long lease, our message is clear – if no remedial action is taken, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is generally accepted that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
The conveyancing solicitors that we work with procure Standish 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 lawyer we work with provide it.
After protracted discussions with the freeholder of her ground floor flat in Standish, Stephanie initiated the lease extension process as the eighty year threshold was swiftly coming. The legal work was concluded in October 2007. The freeholder’s costs were restricted to below 500 pounds.
In 2014 we were approached by Dr L Scott who, having purchased a one bedroom apartment in Standish in October 2009. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Identical homes in Standish with 100 year plus lease were valued about £210,600. The mid-range ground rent payable was £45 invoiced per annum. The lease termination date was in 2087. Given that there were 62 years unexpired we approximated the premium to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of fees.
In 2013 we were phoned by Dr Muhammad Edwards who, having bought a newly refurbished apartment in Standish in November 2004. We are asked if we could approximate the premium could be for a ninety year lease extension. Similar residencies in Standish with a long lease were in the region of £265,000. The mid-range amount of ground rent was £50 collected annually. The lease expiry date was in 2098. Given that there were 73 years outstanding we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.