The value of Tiptree leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase substantially once the unexpired lease term is less than eighty years
Leasehold premises in Tiptree with over 100 years left 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 property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Tiptree 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 conveyancer we work with provide it.
After unsuccessful discussions with the freeholder of her two bedroom flat in Tiptree, Jasmine commenced the lease extension process as the eighty year threshold was swiftly approaching. The lease extension was concluded in June 2010. The freeholder’s charges were kept to an absolute minimum.
Mrs B Bennett owned a one bedroom flat in Tiptree in January 2001. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Similar flats in Tiptree with a long lease were valued about £200,800. The average ground rent payable was £65 billed per annum. The lease end date was in 2086. Considering the 60 years left we approximated the premium to the landlord for the lease extension to be between £20,900 and £24,200 not including legals.
In 2014 we were contacted by Ms J Baker who, having bought a ground floor apartment in Tiptree in March 1997. The question was if we could approximate the price would likely be to extend the lease by ninety years. Comparable properties in Tiptree with a long lease were worth £260,000. The mid-range ground rent payable was £50 collected yearly. The lease came to a finish on 4 July 2097. Taking into account 71 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus professional charges.