For anyone whose Totland home is held on a long lease, the message is clear – if no remedial action is taken, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
Leasehold properties in Totland with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant 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. |
| Chelsea 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Regardless of whether you are a tenant or a landlord in Totland,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Totland valuers.
Subsequent to lengthy negotiations with the landlord of her studio apartment in Totland, Imogen initiated the lease extension process just as her lease was approaching the all-important 80-year mark. The lease extension was concluded in September 2006. The landlord’s charges were kept to an absolute minimum.
In 2011 we were e-mailed by Mr U Turner who, having acquired a purpose-built apartment in Totland in March 2007. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Similar flats in Totland with an extended lease were in the region of £235,200. The average ground rent payable was £45 billed every twelve months. The lease expired on 3 August 2091. Taking into account 66 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 plus professional charges.
In 2013 we were approached by Mr and Mrs. O Bertrand who, having moved into a one bedroom apartment in Totland in April 2012. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Similar properties in Totland with a long lease were worth £275,000. The average ground rent payable was £55 invoiced per annum. The lease concluded on 21 February 2102. Given that there were 77 years outstanding we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of legals.