Potton leases on residential deteriorating in value. if your lease has about ninety years unexpired, you should start considering the need for a lease extension. It is important to recognise that it is that it is desirable for a lease extension to be in place before the term of the current lease dips below eighty years - otherwise a higher premium will be payable. Leasehold owners in Potton will usually be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to confirm if you qualify. In some circumstances you may not be entitled. There are prescribed deadlines and formalities to comply with once the process is triggered so it’s prudent to be guided by a conveyancer during the process.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Engaging our service will provide you increased control over the value of your Potton leasehold, as your property will be more valuable and marketable in respect 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.
Jayden was the the leasehold owner of a 2 bedroom apartment in Potton being sold with a lease of just over 72 years unexpired. Jayden informally spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jayden to exercise his statutory right. Jayden obtained expert legal guidance and secured an acceptable resolution informally and readily saleable.
In 2011 we were approached by Ms I André who, having purchased a one bedroom apartment in Potton in April 1995. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparative residencies in Potton with 100 year plus lease were valued around £208,600. The average amount of ground rent was £60 invoiced every twelve months. The lease ended on 19 June 2083. Given that there were 57 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including fees.
In 2011 we were phoned by Ms H Lee who, having moved into a basement flat in Potton in February 2012. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical residencies in Potton with a long lease were valued about £200,000. The mid-range ground rent payable was £50 billed quarterly. The lease expiry date was in 2103. Given that there were 77 years unexpired we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.