Silsoe 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 the lease becomes more expensive. It is the case that most Silsoe tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Silsoe you must check if your lease has between seventy and 90 years left. There are compelling reasons why a Silsoe leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is actioned without delay
Leasehold properties in Silsoe with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Silsoe 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.
Last Spring William, started to get near to the 80-year mark with the lease on his leasehold flat in Silsoe. In buying his home 19 years ago, the unexpired term was of minimal interest. Fortunately, he noticed he would soon be paying an escalated premium for a lease extension. William arranged for a lease extension just under the wire last July. William and the freeholder via the managing agents eventually agreed on an amount of £6,000 . If he not met the deadline, the amount would have become more costly by a minimum £1,100.
Last Spring we were approach by Mr L Vincent , who was assigned a lease of a one bedroom flat in Silsoe in January 2012. The question was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable flats in Silsoe with 100 year plus lease were valued about £243,000. The average amount of ground rent was £65 collected every twelve months. The lease elapsed in 2089. Having 63 years as a residual term we calculated the premium to the landlord to extend the lease to be within £20,000 and £23,000 exclusive of professional charges.
Last Spring we were called by Dr P Torres , who completed a studio flat in Silsoe in January 2005. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Identical residencies in Silsoe with a long lease were valued about £181,600. The mid-range ground rent payable was £55 collected every twelve months. The lease terminated in 2078. Considering the 52 years outstanding we calculated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 plus legals.