About to place a bid on a leasehold flat in Bishops Stortford. The selling agents say that it is the norm for flats in Bishops Stortford to have less than 75 years remaining. I am taking out a mortgage with The Mortgage Works. Is this going to be a problem if the lease has 70 years left.
Most leasehold conveyancing experts should be able to deal with a lease extension. if you are obtaining a mortgage then your lender may insist that the lease be extended before competition. The Mortgage Works have specific requirements as set out in the UK Finance Lenders’ Handbook in relation to minimum unexpired lease terms. As of 9/5/2024 the requirements read as follows :
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
LEASE EXTENSIONS
We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office
My friend recommended that if I am purchasing in Bishops Stortford I should ask my conveyancer to carry out a Neighbourhood, Planning and Local Amenity Search. What does it cover?
This is a search is sometimes included in the estimate for your Bishops Stortford conveyancing searches. It is a large report of more than thirty pages, listing and setting out important information about Bishops Stortford around the property and the people living there. It incorporates an Aerial Photograph, Planning Applications, Land Use, Mobile Phone Masts, Rights of Way, the Bishops Stortford Housing Market, Council Tax Banding, the type of People living in the area, the dominant type of Housing, the Average House Prices, Crime statistics, Bishops Stortford Education with plans and statistics, Local Amenities and other useful data regarding Bishops Stortford.
About to purchase a new build flat in Bishops Stortford. Conveyancing is daunting at the best of times but I have never purchased a new build flat before. What sort of enquires would be asked in new build legal work.
Set out below are examples of a few leasehold new build enquiries that you can expect your new-build leasehold conveyancing in Bishops Stortford
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There must be mutual enforceability of lessee’s covenants. Where service of notices and proceedings can be at the property demised please confirm that this can be amended to include simultaneous services at the Lessees’ solicitors’ offices where the Lessee from time to time is not resident in the UK - such solicitors may be varied by notice in writing to the Landlord from time to time but otherwise will be as previously specified. Will the freehold then be transferred for a nominal consideration (not exceeding £100) to the Management Company? The Landlord must covenant to assume the management if the Management Company goes into liquidation or otherwise defaults in running the management scheme. Please supply a car parking plan.
I need to appoint a conveyancing solicitor for leasehold conveyancing in Bishops Stortford. I happened to stumble upon a site which seems to have the ideal offering If it is possible to get all formalities completed via web that would be ideal. Do I need to be wary? What should out be looking out for?
As usual with these online conveyancers you need to read ALL the small print - did you notice the extra charge for dealing with the mortgage?
I only have 68 years left on my lease in Bishops Stortford. I am keen to get lease extension but my freeholder is absent. What should I do?
On the basis that you meet the appropriate requirements, under the Leasehold Reform, Housing and Urban Development Act 1993 you can submit an application to the County Court for an order to dispense with the service of the initial notice. This will mean that your lease can be extended by the Court. You will be obliged to demonstrate that you have used your best endeavours to track down the lessor. For most situations a specialist may be useful to conduct investigations and prepare a report which can be accepted by the court as proof that the landlord is indeed missing. It is advisable to get professional help from a conveyancer in relation to investigating the landlord’s disappearance and the vesting order request to the County Court overseeing Bishops Stortford.
I invested in buying a garden flat in Bishops Stortford, conveyancing having been completed August 2011. Can you let me have an estimated range of the fair premium for a lease extension? Similar properties in Bishops Stortford with a long lease are worth £211,000. The average or mid-range amount of ground rent is £45 invoiced annually. The lease comes to an end on 21st October 2092
With only 68 years remaining on your lease the likely cost is going to be between £9,500 and £11,000 as well as plus your own and the landlord's "reasonable" professional fees.
The figure that we have given is a general guide to costs for extending a lease, but we cannot give you the actual costs in the absence of detailed investigations. You should not use the figures in tribunal or court proceedings. There are no doubt additional issues that need to be taken into account and you obviously want to be as accurate as possible in your negotiations. Neither should you move forward based on this information before getting professional advice.
My husband and I are buying a four room bungalowin Bishops Stortford with a loan from a mortgage company. We have a solicitor in Bishops Stortford yet our mortgage company advise he's not approved on their "panel". Apparently we need to choose from the our lender panel solicitors or stay with our Bishops Stortford solicitor and incur the extra costs for one of their panel ones to represent them. This seems very unfair; is there anything we can do?
No, not really. The lender home loan issued is subject to its terms and conditions, one of which will be that solicitors will on the mortgage company's conveyancing panel. in the past, most lenders had open panels, including almost all conveyancing solicitors in Bishops Stortford : a mortgagee could choose one for themselves, as long as it was on the lender's panel. The lender would then simply instruct the borrower's lawyers to act for the lender, too. You can use your lender's panel lawyers or you could borrow from another lender which does not restrict your choice. A further alternative is for your solicitors to apply to be on the conveyancing panel for your mortgage company.