Farnham Royal leases on residential properties are gradually losing value. Where your lease has in the region of ninety years unexpired, you should start thinking about 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 falls lower than 80 years - otherwise a higher amount will be payable. Leasehold owners in Farnham Royal will usually qualify for a lease extension; however it’s a good idea to check with a conveyancer to check your eligibility. In certain cases you may not be entitled. There are prescribed deadlines and procedures to comply with once the process is initiated so it’s sensible to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Farnham Royal,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Farnham Royal valuers.
Last year Arthur, came precariously near to the 80-year threshold with the lease on his ground floor flat in Farnham Royal. In buying his property two decades ago, the unexpired term was of minimal significance. Fortunately, it dawned on him that he would soon be paying an inflated amount for Extending the lease. Arthur arranged for a lease extension just ahead of time last April. Arthur and the landlord subsequently settled on the final figure of £5,500 . If the lease had slid lower than eighty years, the amount would have become more exhorbitant by a minimum £850.
In 2014 we were approached by Mrs E Murphy who, having purchased a one bedroom flat in Farnham Royal in November 1998. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative flats in Farnham Royal with a long lease were in the region of £235,200. The mid-range ground rent payable was £45 invoiced every twelve months. The lease concluded on 22 February 2091. Having 66 years remaining we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of costs.
In 2013 we were called by Mr and Mrs. I Phillips who, having moved into a ground floor apartment in Farnham Royal in January 1995. The dilemma was if we could approximate the price would likely be for a ninety year lease extension. Comparable residencies in Farnham Royal with an extended lease were worth £275,000. The mid-range amount of ground rent was £55 invoiced annually. The lease terminated on 4 March 2102. Given that there were 77 years left we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus legals.