Redland residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
Leasehold residencies in Redland with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date 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 procure Redland 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 conveyancing solicitor we work with provide it.
In 2014 Ryan, came very near to the 80-year threshold with the lease on his one bedroom flat in Redland. In buying his property two decades ago, the lease term was of no relevance. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Ryan arranged for a lease extension at the eleventh hour last May. Ryan and the freeholder in the end agreed on an amount of £5,500 . If he had missed the deadline, the amount would have gone up by at least £1,025.
Last year we were e-mailed by Mr and Mrs. N Cox , who was assigned a lease of a first floor apartment in Redland in June 1998. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Similar properties in Redland with a long lease were valued around £285,000. The average ground rent payable was £55 collected quarterly. The lease concluded on 6 April 2106. Considering the 80 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including expenses.
Mr and Mrs. U Sharif was assigned a lease of a recently refurbished flat in Redland in January 2010. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by an additional years. Similar properties in Redland with an extended lease were in the region of £200,800. The mid-range ground rent payable was £65 billed annually. The lease expired on 4 January 2086. Given that there were 60 years remaining we estimated the compensation to the landlord to extend the lease to be within £20,900 and £24,200 exclusive of legals.