Colchester leases on residential properties are gradually losing value. Where your lease has about 90 years remaining, you should start considering the need for a lease extension. 80 years is a significant number: when the unexpired term of a lease falls below this level then you begin paying an additional element called marriage value. Leasehold owners in Colchester will usually qualify for a lease extension; however a solicitor will check if you qualify. In certain situations you may not qualify. There are prescribed deadlines and procedures to follow once the process has commenced so it’s best to be guided by a conveyancer during the process.
Leasehold properties in Colchester with more than 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Colchester leasehold, as your property will be more valuable and marketable in terms of 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.
Half a year ago Muhammad, came critically close to the 80-year threshold with the lease on his studio apartment in Colchester. Having purchased his flat two decades ago, the length of the lease was of little bearing. Fortunately, he recognised he needed to take action soon on a lease extension. Muhammad extended the lease just in the nick of time last May. Muhammad and the landlord ultimately agreed on sum of £6,000 . If the lease had fallen below 80 years, the figure would have increased by at least £1,025.
In 2009 we were phoned by Mr and Mrs. H Pérez who, having completed a first floor flat in Colchester in August 2000. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by a further 90 years. Identical homes in Colchester with 100 year plus lease were in the region of £255,000. The mid-range ground rent payable was £50 collected monthly. The lease terminated in 2095. Considering the 70 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus expenses.
Last November we were phoned by Mr and Mrs. M Alexander , who owned a garden apartment in Colchester in April 1995. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Comparative flats in Colchester with a long lease were valued around £246,800. The mid-range amount of ground rent was £60 invoiced monthly. The lease expired in 2075. Having 50 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £44,700 and £51,600 exclusive of costs.