Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Fenny Stratford. Inevitably, the term of lease remaining shortens over time. This may pass by relatively unnoticed when the flat or house needs to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension. Qualifying leaseholders in Fenny Stratford have the right to extend the lease for a further ninety years under statute. Do give due consideration before delaying your Fenny Stratford lease extension. Holding off that expense now only increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a residential leasehold with more than 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 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with handle Fenny Stratford 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 conveyancer we work with provide it.
Ryan owned a conversion apartment in Fenny Stratford being sold with a lease of fraction over sixty years remaining. Ryan informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Ryan to invoke his statutory right. Ryan obtained expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
In 2011 we were called by Dr Y Flores who, having bought a ground floor apartment in Fenny Stratford in June 2011. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar flats in Fenny Stratford with a long lease were in the region of £205,000. The mid-range ground rent payable was £50 invoiced yearly. The lease came to a finish in 2104. Given that there were 79 years unexpired we approximated the compensation to the landlord for the lease extension to be within £7,600 and £8,800 plus fees.
Mr and Mrs. C Brooks completed a studio apartment in Fenny Stratford in June 1996. The question was if we could shed any light on how much (roughly) price would likely be to extend the lease by a further 90 years. Identical properties in Fenny Stratford with an extended lease were worth £270,000. The average amount of ground rent was £65 invoiced monthly. The lease termination date was in 2093. Having 68 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of legals.