Monday 23 December 2013

Ever thought of specialising in Lease Extensions?

There are up to 1.43 million homes in the UK  are at risk from shortening leasehold terms – threatening borrowers and lenders with negative equity. This represents a significant amount of potential conveyancing work. 

As the leasehold tenure falls below eighty years, the value of the property begins to fall and value of the property plummets rapidly once the lease runs down to below 60 years. 

Apartments are particularly at risk given that most UK flats are leasehold rather than freehold. Of the 1.43 million leasehold properties in the UK, 817,000 are flats, while the remaining 612,000 are houses. This means inner city urban areas are disproportionately affected by the problem of shortening lease terms. 

Searches on Google have increased dramatically over the last five years surrounding key words around lease terms.The team at Lexsure have experience in building lease extension calculators for law firms. 

Interest-only mortgage borrowers are most at risk. If the borrower is just servicing the mortgage on a leasehold property, once the unexpired lease runs below 80 years the value of the property falls close to the outstanding balance off the mortgage and shortly afterwards can fall into negative equity.
A large block of interest-only borrowers are potentially at risk. Since 2002, there are estimated to have been 1.28 million interest-only loans granted for house purchase loans which have no repayment plan. This represents 14% of total house purchases over since the turn on the century. 

What are you doing to contact your existing clients about extending their leases or attracting new clients that may need a lease extension?

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