It’s a harsh truth that a Long Eaton residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Long Eaton property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher amount will be due. Most flat owners in Long Eaton will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally accepted that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
Retaining our service will provide you better control over the value of your Long Eaton leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to protracted discussions with the landlord of her two bedroom apartment in Long Eaton, Stephanie commenced the lease extension process as the eighty year mark was rapidly approaching. The legal work was concluded in June 2005. The landlord’s fees were kept to an absolute minimum.
Dr F Cooper was assigned a lease of a one bedroom flat in Long Eaton in February 2008. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Comparative residencies in Long Eaton with an extended lease were valued around £200,000. The average ground rent payable was £50 billed every twelve months. The lease elapsed on 10 January 2102. Given that there were 77 years remaining we approximated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus legals.
Last Spring we were contacted by Dr Joshua Hall , who completed a one bedroom apartment in Long Eaton in July 2007. We are asked if we could estimate the premium could be to prolong the lease by an additional years. Comparable flats in Long Eaton with 100 year plus lease were in the region of £260,200. The mid-range ground rent payable was £65 billed yearly. The lease elapsed on 24 August 2091. Taking into account 66 years outstanding we calculated the compensation to the landlord for the lease extension to be within £16,200 and £18,600 exclusive of expenses.