Owning a flat usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Whimple. Inevitably, the length of lease remaining reduces over time. This is often overlooked and only raises itself as an issue when the property needs to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Qualifying long lease owners in Whimple have the legal entitlement to extend the lease for a further 90 years in accordance with Leasehold Reform legislation. Do give careful deliberation before putting off your Whimple lease extension. Holding off that expense now simply increases the price you will ultimately have to pay to extend your lease
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. |
| 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 freeholder in Whimple,the lease extension solicitors 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 Whimple valuers.
Blake owned a high value flat in Whimple being marketed with a lease of a little over fifty eight years left. Blake on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 per annum. Ordinarily, ground rent would not be payable on a lease extension were Blake to invoke his statutory right. Blake procured expert advice and secured satisfactory deal without resorting to tribunal and sell the property.
Last Christmas we were phoned by Mr and Mrs. O Martínez , who purchased a one bedroom flat in Whimple in September 2001. We are asked if we could estimate the price could be for a 90 year lease extension. Identical residencies in Whimple with a long lease were worth £300,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease came to a finish on 28 February 2101. Taking into account 75 years remaining we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.
Dr Joshua Laurent acquired a one bedroom apartment in Whimple in May 2008. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable residencies in Whimple with a long lease were valued about £250,400. The average amount of ground rent was £65 collected monthly. The lease termination date was in 2090. Given that there were 64 years left we calculated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 exclusive of legals.