The value of Tiptree leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the unexpired lease term is below than 80 years
Leasehold properties in Tiptree with in excess of one hundred years left 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 |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Godiva Mortgages | 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. |
The conveyancing solicitors that we work with handle Tiptree 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.
Twenty four months ago Jamie, started to get near to the eighty-year threshold with the lease on his two bedroom apartment in Tiptree. In buying his home two decades ago, the lease term was of minimal significance. by good luck, he recognised he would imminently be paying an escalated premium for Extending the lease. Jamie arranged for a lease extension at the eleventh hour last June. Jamie and the freeholder via the management company eventually agreed on an amount of £5,500 . If he had missed the deadline, the amount would have escalated by a minimum £900.
In 2012 we were contacted by Mr and Mrs. Y Lewis who, having was assigned a lease of a basement flat in Tiptree in November 2000. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparable homes in Tiptree with an extended lease were in the region of £191,000. The mid-range amount of ground rent was £65 billed annually. The lease finished on 27 July 2083. Given that there were 58 years remaining we estimated the premium to the landlord to extend the lease to be between £23,800 and £27,400 plus costs.
In 2013 we were called by Dr T Leroy who, having moved into a purpose-built flat in Tiptree in July 2005. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative residencies in Tiptree with 100 year plus lease were in the region of £250,000. The average ground rent payable was £50 invoiced quarterly. The lease concluded in 2094. Considering the 69 years outstanding we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.