Toton leases on domestic properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. It is important to recognise that it is that it is desirable for a lease extension to be in place before the term of the current lease dips below 80 years - otherwise a higher amount will be due. Flat owners in Toton will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to confirm your eligibility. In some situations you may not qualify. There are prescribed timetables and formalities to comply with once the process has commenced so it’s prudent to be guided by a conveyancer during the process.
Leasehold properties in Toton with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Toton 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.
In recent months Aarav, started to get near to the 80-year mark with the lease on his basement apartment in Toton. In buying his property twenty years previously, the lease term was of no importance. Luckily, it dawned on him that he needed to take action soon on a lease extension. Aarav extended the lease just ahead of time in March. Aarav and the freeholder via the management company eventually settled on an amount of £6,000 . If the lease had descended below eighty years, the price would have increased by at least £1,100.
In 2010 we were phoned by Mr Seth David who, having purchased a one bedroom flat in Toton in September 1996. The dilemma was if we could estimate the premium would be to extend the lease by a further 90 years. Comparable residencies in Toton with 100 year plus lease were worth £189,000. The mid-range amount of ground rent was £55 billed per annum. The lease terminated in 2078. Given that there were 53 years left we approximated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of legals.
In 2014 we were contacted by Dr K Stewart who, having moved into a garden flat in Toton in November 1996. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparative flats in Toton with an extended lease were valued about £290,000. The mid-range ground rent payable was £45 billed quarterly. The lease lapsed on 1 January 2098. Taking into account 73 years outstanding we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.