About to place a bid on a leasehold apartment in Cookham. The selling agents assure me that it is the norm for flats in Cookham to have less than 75 years remaining. I am taking out a mortgage with Nationwide Building Society. Is this going to be acceptable if the lease has 70 years unexpired.
Most leasehold conveyancing experts should be able to deal with a lease extension. if you are getting a mortgage then your lender may insist that the lease be extended before competition. Nationwide Building Society have specific requirements as set out in the UK Finance Lenders’ Handbook in relation to minimum unexpired lease terms. As of 18/7/2024 the requirements read as follows :
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).
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
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.
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 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- 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 is 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 55 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% 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 (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- 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 (does not apply to Shared Ownership)
- 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 charged which is more than on a peppercorn basis
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% 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 Issuing Office.
I am looking for a flat up to £195,000 and identified one near me in Cookham I like with a park and transport links nearby, however it's only got 51 remaining years left on the lease. I can't really find anything else in Cookham for this price, so just wondered if I would be making a grave error acquiring a lease with such few years left?
If you need a mortgage that many years will be problematic. Reduce the offer by the expected lease extension will cost if it has not already been discounted. If the current owner has owned the property for a minimum of 2 years you can ask them to start the process of the extension and pass it to you. An additional ninety years can be extended on to the existing lease and have £0 ground rent by law. You should consult your conveyancing solicitor about this.
I am downsizing from my home. My former solicitors closed down. I would be grateful for any recommendation of a conveyancing firm. I happen to live in Cookham if that affects matters.
Do use our search tool to help you find a solicitor for your conveyancing in Cookham. We have connected thousands of home buyers and sellers with lender approved solicitors to ensure that the legalities of their house move goes with a minimum of fuss.
Is it best to choose a Cookham conveyancing solicitor who is local to the property I am purchasing? We have a good friend who can conduct the legal work however her office is 400miles drive away.
The benefit of a high street Cookham conveyancing practice is that you can visit the firm to execute paperwork, hand in your identification documents and apply pressure on them if necessary. Having local Cookham know how is a benefit. That being said it's more important to get someone that will do a good and efficient job. If you know people who used your friend and they were content that should trump using an unknown Cookham conveyancing lawyer solely due to them being Cookham based.
My wife and I plan to buy our 1st house in Cookham. Conveyancing practitioner already instructed. The financial consultant pointed out that a survey is not needed as the property was only built in 2002.
At the very least you should have a Home Buyer's Report. Given the residence is more than ten years old the property will not come with a warranty, so you don't want to take a risk. For a property that age with no signs of problems a Home Buyer's report may be enough. They will highlight any apparent issues and suggest further investigation if appropriate. Where there are any signs of problems obtain a comprehensive Building Survey from the beginning.