Potton leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Potton enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Potton you would be well advised to investigate if your lease has between 70 and 90 years remaining. There are compelling reasons why a Potton flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is effected without delay
Leasehold residencies in Potton with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Using our service gives you enhanced control over the value of your Potton 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 have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Henry, started to get close to the 80-year threshold with the lease on his leasehold flat in Potton. Having bought his property 19 years ago, the unexpired term was of minimal importance. As luck would have it, he noticed he would imminently be paying an escalated premium for Extending the lease. Henry arranged for a lease extension just under the wire in July. Henry and the freeholder via the management company eventually agreed on sum of £6,000 . If he not met the deadline, the price would have escalated by a minimum £975.
In 2013 we were e-mailed by Mr and Mrs. P López who, having moved into a garden apartment in Potton in November 2004. The question was if we could approximate the premium would likely be for a ninety year lease extension. Comparable properties in Potton with an extended lease were in the region of £290,000. The average amount of ground rent was £45 billed every twelve months. The lease ran out on 20 September 2099. Taking into account 73 years outstanding we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of costs.
Last month we were called by Mr and Mrs. U Edwards , who bought a ground floor apartment in Potton in November 1998. We are asked if we could approximate the price would be for a 90 year lease extension. Similar homes in Potton with an extended lease were in the region of £240,600. The average amount of ground rent was £60 collected quarterly. The lease elapsed on 18 June 2088. Given that there were 62 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 not including professional charges.