Frizington leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Frizington tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Frizington you must investigate if your lease has between seventy and ninety years left. There are compelling reasons why a Frizington flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is put in place without delay
Leasehold premises in Frizington with over 100 years left on the lease are often 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 to be gained by buying the reversionary interest unless savings on ground rent and service 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
The conveyancers that we work with handle Frizington 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.
Trailing protracted discussions with the landlord of her studio flat in Frizington, Bethan started the lease extension process as the 80 year mark was quickly advancing. The transaction was finalised in September 2005. The landlord’s charges were kept to an absolute minimum.
Ms Lucy Lewis took over the lease of a ground floor flat in Frizington in March 1998. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Comparable properties in Frizington with 100 year plus lease were in the region of £230,800. The average ground rent payable was £60 invoiced yearly. The lease lapsed on 18 November 2085. Considering the 60 years as a residual term we calculated the premium to the landlord for the lease extension to be within £24,700 and £28,600 plus professional charges.
Last year we were contacted by Dr E Flores , who took over the lease of a one bedroom flat in Frizington in July 2010. The question was if we could estimate the price would likely be for a ninety year lease extension. Identical flats in Frizington with a long lease were valued around £210,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease ran out in 2105. Considering the 80 years outstanding we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of legals.