Unfortunately that a Clophill residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Clophill property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining drops below 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Clophill will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Clophill 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 conveyancer we work with provide it.
Rory owned a conversion flat in Clophill being sold with a lease of a little over 59 years remaining. Rory informally approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 yearly. No ground rent would be payable on a lease extension were Rory to invoke his statutory right. Rory procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
Last Christmas we were e-mailed by Mr Jasper Girard , who owned a one bedroom flat in Clophill in January 2009. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by an additional years. Similar premises in Clophill with 100 year plus lease were valued around £255,000. The mid-range ground rent payable was £50 billed annually. The lease elapsed in 2097. Having 71 years unexpired we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus legals.
Last month we were approach by Mrs Victoria Bell , who acquired a studio apartment in Clophill in November 2011. The question was if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Similar flats in Clophill with an extended lease were valued around £254,200. The mid-range amount of ground rent was £60 invoiced yearly. The lease ran out on 4 May 2077. Having 51 years remaining we calculated the premium to the freeholder to extend the lease to be within £43,700 and £50,600 not including expenses.