Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Temple. Inevitably, the term of lease remaining reduces as time goes by. This is often overlooked and only becomes a problem when the residence needs to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Qualifying leaseholders in Temple have the right to extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. You should give careful consideration before putting off your Temple lease extension. Putting off the cost now simply increases the price you will eventually incur to extend your lease
Leasehold premises in Temple with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 Temple 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 conveyancer we work with provide it.
Reuben owned a high value flat in Temple being marketed with a lease of just over fifty eight years unexpired. Reuben informally contacted his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Reuben to invoke his statutory right. Reuben procured expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
In 2013 we were contacted by Mr and Mrs. W García who, having was assigned a lease of a studio apartment in Temple in September 2007. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Comparable homes in Temple with a long lease were valued around £200,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease terminated in 2102. Having 77 years unexpired we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus costs.
An example of a Lease Extension matter before the tribunal for a Temple residence 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 related to 1 flat. The unexpired lease term was 66.8 years.