Unfortunately that a Basildon residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Basildon property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term slips below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Basildon will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold residencies in Basildon with in excess of one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you better control over the value of your Basildon leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Hunter was the the leasehold owner of a high value apartment in Basildon being marketed with a lease of a few days over fifty eight years remaining. Hunter informally spoke with his landlord a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Hunter to invoke his statutory right. Hunter obtained expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Summer we were approach by Dr Hollie Norbert , who bought a ground floor flat in Basildon in June 2012. The dilemma was if we could estimate the premium would be for a ninety year lease extension. Identical properties in Basildon with 100 year plus lease were worth £174,200. The average amount of ground rent was £55 billed per annum. The lease ran out in 2077. Taking into account 51 years outstanding we approximated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of legals.
In 2013 we were contacted by Dr Y White who, having completed a one bedroom flat in Basildon in February 2010. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar properties in Basildon with an extended lease were valued around £285,000. The mid-range ground rent payable was £45 billed annually. The lease concluded in 2097. Given that there were 71 years as a residual term we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of fees.