Unfortunately that a Temple residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Temple property prices.Where your lease has approximately ninety years left, you should start considering 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 80 years - otherwise a higher premium will be due. The majority of flat owners in Temple will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold residencies in Temple with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Temple leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Mason, came seriously close to the eighty-year mark with the lease on his purpose- built flat in Temple. Having purchased his flat two decades ago, the lease term was of little relevance. Luckily, he noticed he needed to take action soon on a lease extension. Mason extended the lease at the eleventh hour in January. Mason and the landlord who owned the flat above subsequently settled on sum of £6,000 . If the lease had fallen to less than eighty years, the figure would have become more exhorbitant by a minimum £1,100.
Last October we were phoned by Mr and Mrs. O Miller , who bought a first floor apartment in Temple in October 1997. We are asked if we could estimate the price could be for a ninety year lease extension. Comparative homes in Temple with 100 year plus lease were valued about £218,400. The mid-range ground rent payable was £60 collected quarterly. The lease concluded on 28 January 2084. Considering the 59 years outstanding we estimated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Temple flat is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case affected 1 flat. The remaining number of years on the lease was 66.8 years.