Owning a flat usually means owning a lease of the property, which has a set term of years. This lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Potton. Inevitably, the period of lease left shortens over time. This is often ignored and only becomes a problem when the flat or house needs to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Potton have the right to extend the lease for an additional ninety years in accordance with Leasehold Reform legislation. Please give due consideration before delaying your Potton lease extension. Holding off that expense now simply increases the price you will ultimately incur for a lease extension
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Potton leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Dylan, came seriously near to the 80-year threshold with the lease on his basement apartment in Potton. In buying his home two decades ago, the unexpired term was of minimal relevance. As luck would have it, he noticed he would soon be paying way over the odds for Extending the lease. Dylan arranged for a lease extension at the eleventh hour in September. Dylan and the landlord subsequently agreed on a premium of £5,500 . If he not met the deadline, the price would have escalated by a minimum £950.
Last July we were contacted by Mrs Sarah Hill , who moved into a basement flat in Potton in February 2007. The question was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable homes in Potton with a long lease were in the region of £200,000. The mid-range ground rent payable was £50 billed yearly. The lease ended in 2102. Taking into account 77 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
Last Autumn we were approach by Mr and Mrs. O Flores , who bought a garden apartment in Potton in November 2000. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Comparative flats in Potton with 100 year plus lease were valued around £260,200. The mid-range ground rent payable was £65 collected yearly. The lease ran out in 2091. Given that there were 66 years outstanding we estimated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 not including professional charges.