Owning a apartment usually means owning a lease of the property, which has a finite term of years. The lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in The Meadows. Clearly, the period of lease left shortens as time goes by. This may slip by relatively unnoticed when the property has to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Eligible long lease owners in The Meadows have the right to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. Do give due attention before putting off your The Meadows lease extension. Holding off the cost now likely increases the price you will eventually have to pay to extend your lease
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you increased control over the value of your The Meadows leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Toby, came perilously near to the eighty-year threshold with the lease on his studio apartment in The Meadows. Having purchased his property two decades ago, the unexpired term was of no interest. by good luck, he realised he would imminently be paying way over the odds for a lease extension. Toby extended the lease just under the wire in August. Toby and the landlord eventually settled on a premium of £5,500 . If he not met the deadline, the amount would have become more costly by at least £1,075.
Last Christmas we were e-mailed by Mr and Mrs. R Wright , who took over the lease of a recently refurbished flat in The Meadows in February 2005. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparable residencies in The Meadows with 100 year plus lease were worth £300,000. The average ground rent payable was £50 billed quarterly. The lease came to a finish on 12 June 2100. Considering the 75 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
In 2011 we were contacted by Mr and Mrs. H Lee who, having took over the lease of a first floor flat in The Meadows in March 2005. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year extension to my lease. Comparable flats in The Meadows with a long lease were in the region of £250,400. The average ground rent payable was £65 billed annually. The lease lapsed in 2089. Taking into account 64 years remaining we approximated the premium to the landlord to extend the lease to be within £19,000 and £22,000 not including costs.