Unfortunately that a Tiptree residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Tiptree property prices.Once your lease gets to 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 dips lower than 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Tiptree will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timetables 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.
Leasehold premises in Tiptree with over 100 years left on the lease are sometimes regarded as a ‘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 reversionary interest unless savings on ground rent and estate charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
Regardless of whether you are a tenant or a landlord in Tiptree,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Tiptree valuers.
Subsequent to unsuccessful discussions with the landlord of her first floor apartment in Tiptree, Natasha commenced the lease extension process just as the lease was approaching the crucial 80-year mark. The transaction was concluded in August 2008. The landlord’s charges were kept to an absolute minimum.
Last Summer we were approach by Dr I Mitchell , who completed a purpose-built flat in Tiptree in July 2001. The question was if we could approximate the premium would likely be to extend the lease by an additional years. Comparative premises in Tiptree with an extended lease were valued about £176,200. The mid-range amount of ground rent was £65 invoiced per annum. The lease lapsed in 2082. Considering the 56 years outstanding we calculated the compensation to the landlord for the lease extension to be within £29,500 and £34,000 exclusive of professional charges.
Dr A Vincent bought a basement apartment in Tiptree in October 2009. We are asked if we could approximate the premium would likely be to prolong the lease by ninety years. Comparable premises in Tiptree with 100 year plus lease were in the region of £242,600. The mid-range amount of ground rent was £45 billed monthly. The lease came to a finish on 25 May 2093. Taking into account 67 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 plus expenses.