Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Telford. Clearly, the length of lease left reduces as time goes by. This is often ignored and only becomes a problem when the flat or house has to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Qualifying long lease owners in Telford have the legal entitlement to extend the lease for an additional 90 years under statute. Do give due attention before putting off your Telford lease extension. Holding off that expense now only increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Engaging our service gives you enhanced control over the value of your Telford leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Henry, came critically close to the eighty-year mark with the lease on his garden apartment in Telford. Having bought his property two decades ago, the length of the lease was of minimal importance. Fortunately, he realised he would imminently be paying an inflated amount for Extending the lease. Henry arranged for a lease extension just under the wire in July. Henry and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If the lease had descended below 80 years, the premium would have escalated by at least £1,050.
Mr Reuben Bennett purchased a ground floor flat in Telford in August 1995. We are asked if we could approximate the premium could be for a 90 year lease extension. Similar residencies in Telford with a long lease were worth £233,200. The average ground rent payable was £60 invoiced annually. The lease concluded in 2086. Given that there were 61 years unexpired we calculated the premium to the landlord to extend the lease to be within £22,800 and £26,400 not including professional charges.
Last Winter we were e-mailed by Dr W Laurent , who moved into a one bedroom apartment in Telford in January 2002. The dilemma was if we could approximate the premium would be to prolong the lease by ninety years. Similar homes in Telford with an extended lease were worth £166,800. The average amount of ground rent was £50 invoiced per annum. The lease finished in 2075. Given that there were 50 years left we estimated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of costs.