For anyone whose Creekmouth flat is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension.
It is conventional wisdom that a residential leasehold with over 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 |
|---|---|
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a landlord in Creekmouth,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Creekmouth valuers.
David owned a studio flat in Creekmouth being sold with a lease of a few days over 59 years left. David informally contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were David to exercise his statutory right. David obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the property.
Mr Muhammad Sánchez took over the lease of a ground floor flat in Creekmouth in May 1999. The question was if we could estimate the premium could be to prolong the lease by ninety years. Comparative premises in Creekmouth with an extended lease were valued about £235,200. The average amount of ground rent was £45 collected every twelve months. The lease came to a finish on 25 September 2091. Having 66 years left we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Creekmouth premises is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case was in relation to 1 flat. The unexpired term was 69.77 years.