For anyone whose Tibshelf property is held on a long lease, the message is clear – if you do nothing, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold premises in Tibshelf with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Tibshelf 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.
Alexander was the the leasehold proprietor of a 2 bedroom flat in Tibshelf on the market with a lease of a few days over 61 years outstanding. Alexander on an informal basis approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Alexander to exercise his statutory right. Alexander procured expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Last Autumn we were called by Mrs Charlotte Leroy , who owned a first floor flat in Tibshelf in September 2012. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by an additional years. Comparable homes in Tibshelf with an extended lease were worth £230,800. The average ground rent payable was £60 collected annually. The lease expired in 2085. Taking into account 60 years remaining we estimated the premium to the freeholder to extend the lease to be within £24,700 and £28,600 not including costs.
Mr and Mrs. O Baker purchased a one bedroom apartment in Tibshelf in October 2005. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Similar properties in Tibshelf with 100 year plus lease were valued around £210,000. The average ground rent payable was £50 invoiced every twelve months. The lease concluded in 2105. Having 80 years left we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of costs.