Tags |
|
|
Links |
|
|
Actual for You - Extension of Short Leases on Central London Properties
HOW ADSENSE WORKS.Before you can understand why Google AdSense is so important to content sites, it’s important to know how AdSense works. The concept is really simple. The publisher or the webmaster needs to inserts a java script into his webpage. Each time the page is accessed, the java script will pull advertisements from the Google server. The ads that are targeted should therefore be related to the content that is contained on the web page serving the ad. If a visitor clicks on an advertisement, the webmaster serving the ad earns a portion of the money that the advertiser is paying the Google for the c
Again, using an existing 15yrs leasehold property and a 5yrs mortgage as an example, it is unlikely that a borrower would opt for a ‘capital and interest’ facility, given the likely repayments. An ‘interest-only’ mortgage product is not attractive to a lender because of the fact that the reducing lease is likely to have a declining value.
The answer can be a hybrid of the two loan types i.e. a mortgage that is part ‘capital and interest’ and part ‘interest-only’ in order that a lender’s exposure re. loan/value is not i
...In many situations we act without even knowing why we act the way we do...This is no longer desirable when your organization is changing too often...Knowledge Management is (amongst other aspects) about making the “private” knowledge “publicly” available...So that you can bridge the Knowledge Gap...But your organization was not used to this. Different teams applied different principles...And now what?How to address this new set of principles so that knowledge management is adopted in the primary process?When existing employees and management get new tasks and when the environment is changed, you cannot l
• The shorter the remaining term of the lease, the more difficult it will be to sell the property or for potential buyers to raise the finance
• Potential lenders usually require a minimum term of lease at outset of a mortgage facility and, also, require a 30+ years left on the lease at maturity of the mortgage term
• Properties in prime areas of Central London, typically, have leases attached to them with less than 30 years remaining (some have much shorter remaining terms)
• Since the Commonhold & Leasehold Reform Act 2002, it has been easier for an owner of a short leasehold property to extend the term of the existing lease, if he/she has owned the property for two or more years
• Few lenders have identified and responded to this niche lending opportunity; those that have done so, consider the location of the property and the status of the freeholder to be important factors in the mortgage application process
• Quality estate agents and valuers, experienced solicitors and enlightened independent mortgage advisers will all have significant roles to play in this business arena Financing the Extension of a Short Lease
A freeholder will require a monetary consideration in order to extend a lease and there are, essentially, three options for making that payment:
• Pay the premium to the freeholder out of one’s own financial resources
• Apply to one’s existing lender for a ‘further advance’ in addition to the existing mortgage
• Apply to another lender for a re-mortgage to pay off one’s existing borrowing and raise the additional amount required to pay the freeholder
A lending institution will value the property on the bases of its current short lease and also the future increased lease term.
If approved, the mortgage will be based upon the revised lease term and, when the funds are released to the acting solicitor’s client account, the new lease will be executed simultaneously.
Illustration:
An applicant has a 5yrs mortgage of ?350,000 on a 15yrs leasehold property valued at ?500,000 and he/she can acquire a 90yrs extension to the lease by paying the freeholder a premium of ?250,000. The property’s value will increase to ?1,000,000 with the new 105yrs lease in place.
A ?600,000 mortgage is approved and the ?350,000 borrowing is redeemed and ?250,000 is paid to the freeholder.
Purchasing a Short Leasehold Property
As, say, a 15yrs lease reduces so does the value of the property decline; a ‘purchase’ application, therefore, challenges a lender more than a ‘re-mortgage’ application.
It is likely that, after two years of ownership, the purchaser will apply to increase the lease as in the preceding scenario; a lender cannot include that factor when considering a mortgage application for a purchase of a short leasehold property.
Again, using an existing 15yrs leasehold property and a 5yrs mortgage as an example, it is unlikely that a borrower would opt for a ‘capital and interest’ facility, given the likely repayments. An ‘interest-only’ mortgage product is not attractive to a lender because of the fact that the reducing lease is likely to have a declining value.
The answer can be a hybrid of the two loan types i.e. a mortgage that is part ‘capital and interest’ and part ‘interest-only’ in order that a lender’s exposure re. loan/value is not im
Search Engine Optimisation (or SEO) alternatively known as Website Promotion Services or Website Ranking Services or Internet Marketing or Online Marketing, they all mean the same thing: getting your website to rank highly for searches that people enter into Search Engines without paying for it.Take a look at Google say, and we're talking about the main list in the centre, and not the sponsored links down the right, or sometimes along the top. Some people call this "organic listings" or "organic search results". The aim of the game is straight forward, when your potential customer searches for "Widget X5000", if you se
• Few lenders have identified and responded to this niche lending opportunity; those that have done so, consider the location of the property and the status of the freeholder to be important factors in the mortgage application process
• Quality estate agents and valuers, experienced solicitors and enlightened independent mortgage advisers will all have significant roles to play in this business arena Financing the Extension of a Short Lease
A freeholder will require a monetary consideration in order to extend a lease and there are, essentially, three options for making that payment:
• Pay the premium to the freeholder out of one’s own financial resources
• Apply to one’s existing lender for a ‘further advance’ in addition to the existing mortgage
• Apply to another lender for a re-mortgage to pay off one’s existing borrowing and raise the additional amount required to pay the freeholder
A lending institution will value the property on the bases of its current short lease and also the future increased lease term.
If approved, the mortgage will be based upon the revised lease term and, when the funds are released to the acting solicitor’s client account, the new lease will be executed simultaneously.
Illustration:
An applicant has a 5yrs mortgage of ?350,000 on a 15yrs leasehold property valued at ?500,000 and he/she can acquire a 90yrs extension to the lease by paying the freeholder a premium of ?250,000. The property’s value will increase to ?1,000,000 with the new 105yrs lease in place.
A ?600,000 mortgage is approved and the ?350,000 borrowing is redeemed and ?250,000 is paid to the freeholder.
Purchasing a Short Leasehold Property
As, say, a 15yrs lease reduces so does the value of the property decline; a ‘purchase’ application, therefore, challenges a lender more than a ‘re-mortgage’ application.
It is likely that, after two years of ownership, the purchaser will apply to increase the lease as in the preceding scenario; a lender cannot include that factor when considering a mortgage application for a purchase of a short leasehold property.
Again, using an existing 15yrs leasehold property and a 5yrs mortgage as an example, it is unlikely that a borrower would opt for a ‘capital and interest’ facility, given the likely repayments. An ‘interest-only’ mortgage product is not attractive to a lender because of the fact that the reducing lease is likely to have a declining value.
The answer can be a hybrid of the two loan types i.e. a mortgage that is part ‘capital and interest’ and part ‘interest-only’ in order that a lender’s exposure re. loan/value is not i
Besides the myriad of problems that a small business owner faces, the most severe issue is lack of capital and limited avenues to raise capital from external sources. Being a small business owner, it is never easy to get a business loan, as most lenders would consider them as borrowers with unstable income and poor credit. Justifiably, as most small business often do not have a steady flow of income in the initial period and runs on low profit, it actually becomes a challenge for the owners to pay off their business loans. Most financial institutions and banks are therefore not very enthusiastic about lending to these small bus
• Apply to one’s existing lender for a ‘further advance’ in addition to the existing mortgage
• Apply to another lender for a re-mortgage to pay off one’s existing borrowing and raise the additional amount required to pay the freeholder
A lending institution will value the property on the bases of its current short lease and also the future increased lease term.
If approved, the mortgage will be based upon the revised lease term and, when the funds are released to the acting solicitor’s client account, the new lease will be executed simultaneously.
Illustration:
An applicant has a 5yrs mortgage of ?350,000 on a 15yrs leasehold property valued at ?500,000 and he/she can acquire a 90yrs extension to the lease by paying the freeholder a premium of ?250,000. The property’s value will increase to ?1,000,000 with the new 105yrs lease in place.
A ?600,000 mortgage is approved and the ?350,000 borrowing is redeemed and ?250,000 is paid to the freeholder.
Purchasing a Short Leasehold Property
As, say, a 15yrs lease reduces so does the value of the property decline; a ‘purchase’ application, therefore, challenges a lender more than a ‘re-mortgage’ application.
It is likely that, after two years of ownership, the purchaser will apply to increase the lease as in the preceding scenario; a lender cannot include that factor when considering a mortgage application for a purchase of a short leasehold property.
Again, using an existing 15yrs leasehold property and a 5yrs mortgage as an example, it is unlikely that a borrower would opt for a ‘capital and interest’ facility, given the likely repayments. An ‘interest-only’ mortgage product is not attractive to a lender because of the fact that the reducing lease is likely to have a declining value.
The answer can be a hybrid of the two loan types i.e. a mortgage that is part ‘capital and interest’ and part ‘interest-only’ in order that a lender’s exposure re. loan/value is not i
In the past, purchasing ad space was the solution to every entrepreneur's marketing challenge. Then it was direct mail, followed by telemarketing. But with advertising and postage costs on the rise, these tactics have lost some of their appeal. Today the competition is fierce for a customers' attention. In order to compete, you need to employ take-it-to-the-customer techniques. Some of these techniques can include attending trade shows, seminars, and sending them to your website. You want to promote your business and in doing so you want to maximize referrals and conduct effective public relations campaigns.
A ?600,000 mortgage is approved and the ?350,000 borrowing is redeemed and ?250,000 is paid to the freeholder.
Purchasing a Short Leasehold Property
As, say, a 15yrs lease reduces so does the value of the property decline; a ‘purchase’ application, therefore, challenges a lender more than a ‘re-mortgage’ application.
It is likely that, after two years of ownership, the purchaser will apply to increase the lease as in the preceding scenario; a lender cannot include that factor when considering a mortgage application for a purchase of a short leasehold property.
Again, using an existing 15yrs leasehold property and a 5yrs mortgage as an example, it is unlikely that a borrower would opt for a ‘capital and interest’ facility, given the likely repayments. An ‘interest-only’ mortgage product is not attractive to a lender because of the fact that the reducing lease is likely to have a declining value.
The answer can be a hybrid of the two loan types i.e. a mortgage that is part ‘capital and interest’ and part ‘interest-only’ in order that a lender’s exposure re. loan/value is not i
Most of us use types of industrial lubricants regularly - if you apply some oil to a squeaky hinge, you are using a lubricant. Of course, many industrial uses of lubricants are much more complex than that; many industries can use a large amount of lubricants on a regular basis.There are several different types of lubricants that are typically used in industry, although the basic purpose of the product is the same – to ensure that moving parts operate more smoothly and to reduce friction. Using the right lubricant can reduce the need for unscheduled maintenance; help to prolong the life of machine components – and ultimat
Again, using an existing 15yrs leasehold property and a 5yrs mortgage as an example, it is unlikely that a borrower would opt for a ‘capital and interest’ facility, given the likely repayments. An ‘interest-only’ mortgage product is not attractive to a lender because of the fact that the reducing lease is likely to have a declining value.
The answer can be a hybrid of the two loan types i.e. a mortgage that is part ‘capital and interest’ and part ‘interest-only’ in order that a lender’s exposure re. loan/value is not impaired.
Illustration:
A lender is prepared to lend 70% of the purchase price/valuation and requires that the exposure is no more than 70% of the declining value at anytime throughout the mortgage term.
Purchase price/valuation of 15yrs leasehold = ?500,000 Valuation of the property with 10yrs remaining = ?350,000 Loan term is 5yrs
The lender is prepared to structure a loan on the basis that enough capital is repaid over the five years in order for the exposure to be no more than 70% of the declining value.
In this scenario, ?350,000 would have been lent at outset (70% of ?500,000 value) and after five years the borrowing would be reduced to ?245,000 (70% of ?350,000 value).
As the mortgage was for a five years term, the borrower would have to pay off the outstanding ?245,000 at this time, having sold the property or from his/her own cash resources or having extended the lease and re-mortgaged.
Summary
The processes of purchasing, re-mortgaging or extending the leases of short leasehold properties require the services of knowledgeable and experienced advisers.
There is a slowly-increasing awareness of the market opportunity by a few of the more forward-thinking and flexible lending institutions.
A huge amount of prime Central London property is short leasehold, owned by highly reputable freeholders that have embraced the enfranchisement Act.
In future, those potential buyers of short leasehold properties or those wishing to extend their existing leases can do so knowing that professional and experienced support is available to them.
Copyright 2006 Nigel Osgood
HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.actual4u.com/article/103245/actual4u-Extension-of-Short-Leases-on-Central-London-Properties.html">Extension of Short Leases on Central London Properties</a>
BB link (for phorums):
[url=http://www.actual4u.com/article/103245/actual4u-Extension-of-Short-Leases-on-Central-London-Properties.html]Extension of Short Leases on Central London Properties[/url]
Related Articles:
What is the Problem With this House? It's Only for Sale
Giving Young People a Chance To Gain Experience and Skills
Writing Articles to Increase Traffic to Your Website
Bookmark it:
|