Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Twyford. Inevitably, the length of lease left reduces over time. This may slip by relatively unnoticed when the flat or house needs to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension. Eligible long lease owners in Twyford have the right to extend the lease for an additional 90 years in accordance with legislation. You should give careful deliberation before putting off your Twyford lease extension. Holding off the cost now simply increases the price you will eventually incur for a lease extension
Leasehold properties in Twyford with more than 100 years outstanding 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 property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
| 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 |
| Yorkshire 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. |
Retaining our service will provide you better control over the value of your Twyford leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Jason, came perilously close to the 80-year mark with the lease on his ground floor flat in Twyford. Having bought his home 18 years ago, the lease term was of no significance. Thankfully, he became aware that he needed to take action soon on Extending the lease. Jason arranged for a lease extension at the eleventh hour last May. Jason and the landlord who owned the flat above eventually settled on a premium of £5,500 . If the lease had dipped below 80 years, the premium would have escalated by a minimum £1,075.
Last Winter we were contacted by Dr M Bonnet , who purchased a studio flat in Twyford in June 2001. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparative premises in Twyford with 100 year plus lease were valued around £208,600. The average ground rent payable was £60 collected per annum. The lease elapsed in 2082. Taking into account 57 years left we calculated the premium to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of legals.
In 2011 we were contacted by Mr and Mrs. I Watson who, having owned a recently refurbished flat in Twyford in July 2001. The question was if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Similar residencies in Twyford with 100 year plus lease were in the region of £200,000. The average ground rent payable was £50 invoiced quarterly. The lease expiry date was on 14 July 2102. Having 77 years remaining we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including fees.