Clifton leases on residential deteriorating in value. if your lease has about ninety years remaining, you should start considering the need for a lease extension. If lease term is less than eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Clifton will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In certain circumstances you may not be entitled. There are prescribed deadlines and procedures to comply with once the process has started so it’s best to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancers that we work with procure Clifton 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 conveyancing solicitor we work with provide it.
Last year Jack, started to get close to the 80-year mark with the lease on his ground floor flat in Clifton. In buying his property two decades ago, the unexpired term was of no interest. by good luck, he noticed he needed to take steps soon on a lease extension. Jack was able to extend his lease just ahead of time in June. Jack and the freeholder via the managing agents ultimately agreed on an amount of £6,000 . If he failed to meet the deadline, the sum would have become more exhorbitant by at least £875.
Mr and Mrs. S García purchased a studio apartment in Clifton in May 2011. The dilemma was if we could approximate the price would be for a ninety year lease extension. Similar residencies in Clifton with an extended lease were in the region of £249,200. The average ground rent payable was £60 invoiced every twelve months. The lease expiry date was on 17 September 2076. Given that there were 51 years outstanding we calculated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 exclusive of expenses.
In 2014 we were phoned by Dr I Taylor who, having purchased a first floor apartment in Clifton in January 2010. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Similar residencies in Clifton with a long lease were worth £210,600. The average ground rent payable was £65 billed annually. The lease came to a finish on 11 April 2087. Taking into account 62 years unexpired we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 not including costs.