It’s a harsh truth that a Redland residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Redland property prices.Once your lease nears 85ish years, you need to start thinking about 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 slips under eighty years - otherwise a higher amount will be payable. Most leasehold owners in Redland will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Redland with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold 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. |
| Bank of Scotland | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancing solicitors 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 Dylan, came perilously close to the eighty-year mark with the lease on his studio flat in Redland. Having purchased his property two decades ago, the unexpired term was of minimal importance. by good luck, he became aware that he would imminently be paying an inflated amount for Extending the lease. Dylan extended the lease just under the wire last August. Dylan and the freeholder via the managing agents subsequently agreed on the final figure of £5,000 . If the lease had slipped lower than 80 years, the premium would have gone up by at least £1,050.
Last Christmas we were approach by Dr Dexter Peterson , who acquired a purpose-built apartment in Redland in May 1997. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparable homes in Redland with an extended lease were worth £210,600. The average amount of ground rent was £45 invoiced annually. The lease lapsed in 2087. Taking into account 62 years left we estimated the compensation to the freeholder to extend the lease to be between £18,100 and £20,800 exclusive of fees.
Dr V Lee completed a first floor apartment in Redland in February 1996. The dilemma was if we could estimate the premium would likely be to prolong the lease by a further 90 years. Comparable properties in Redland with an extended lease were worth £265,000. The average ground rent payable was £50 collected per annum. The lease elapsed on 14 August 2098. Considering the 73 years left we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of expenses.