Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Steyning. Clearly, the term of lease left reduces over time. This may slip by relatively unnoticed when the property has to be sold or refinanced. The shorter the lease the less it is worth and the more it will cost to extend the lease. Qualifying leaseholders in Steyning have the right to extend the lease for an additional 90 years in accordance with legislation. You should give careful deliberation before delaying your Steyning lease extension. Putting off that expense now likely increases the price you will ultimately have to pay for a lease extension
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
The conveyancing solicitors that we work with handle Steyning 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.
Logan owned a high value apartment in Steyning being marketed with a lease of a few days over 72 years outstanding. Logan informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 annually. No ground rent would be due on a lease extension were Logan to exercise his statutory right. Logan procured expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Dr F Harris purchased a basement apartment in Steyning in September 2005. The dilemma was if we could estimate the price would likely be for a 90 year lease extension. Similar flats in Steyning with an extended lease were in the region of £200,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease concluded in 2103. Having 77 years remaining we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.
In 2010 we were called by Dr Y Ward who, having was assigned a lease of a ground floor flat in Steyning in February 2002. The question was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparative residencies in Steyning with 100 year plus lease were worth £267,600. The mid-range ground rent payable was £65 invoiced annually. The lease expired in 2093. Considering the 67 years outstanding we estimated the premium to the landlord to extend the lease to be between £14,300 and £16,400 exclusive of professional charges.