As the length of the unexpired term of a Basildon domestic lease lessens so does its value and therefore the value of your property. Where the lease has, in excess of 125 years remaining then this decrease may be negligible that being said there will become a point in time when a lease has under than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner as opposed to later. Most flat owners in Basildon will qualify for this right; nevertheless a conveyancing solicitor should be able to confirm whether you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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 | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you better control over the value of your Basildon leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
James was the the leasehold owner of a studio flat in Basildon being marketed with a lease of a little over 61 years remaining. James informally contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 annually. No ground rent would be payable on a lease extension were James to exercise his statutory right. James procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. S Nelson , who completed a studio flat in Basildon in May 2003. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Comparable flats in Basildon with a long lease were worth £290,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease terminated in 2099. Having 73 years unexpired we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including professional charges.
Mr and Mrs. W Smith moved into a ground floor apartment in Basildon in July 2011. The question was if we could approximate the premium would likely be for a ninety year lease extension. Comparable homes in Basildon with an extended lease were valued around £240,600. The mid-range ground rent payable was £60 billed annually. The lease concluded on 4 January 2088. Given that there were 62 years outstanding we approximated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 plus costs.