Unfortunately that a Clarborough residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Clarborough property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be due. Most leasehold owners in Clarborough will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold properties in Clarborough with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with procure Clarborough lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Following unsuccessful negotiations with the freeholder of her leasehold flat in Clarborough, Samantha initiated the lease extension process as the 80 year mark was fast nearing. The legal work was concluded in February 2005. The landlord’s charges were kept to an absolute minimum.
Mr and Mrs. R Khan moved into a garden apartment in Clarborough in July 2005. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Comparable premises in Clarborough with an extended lease were in the region of £206,200. The mid-range ground rent payable was £60 collected per annum. The lease termination date was on 3 October 2081. Given that there were 56 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £32,300 and £37,400 not including expenses.
In 2010 we were e-mailed by Ms B Richardson who, having bought a studio flat in Clarborough in May 2007. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar homes in Clarborough with a long lease were valued around £300,000. The mid-range ground rent payable was £50 billed yearly. The lease expired in 2101. Given that there were 76 years remaining we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of expenses.