It’s an underpublicised certainty that a Fenstanton residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Fenstanton property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining slips under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Fenstanton will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the process.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Fenstanton,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Fenstanton valuers.
Last year Sam, came dangerously near to the eighty-year threshold with the lease on his leasehold apartment in Fenstanton. Having purchased his flat two decades ago, the unexpired term was of no relevance. As luck would have it, he recognised he would soon be paying an inflated amount for a lease extension. Sam arranged for a lease extension just under the wire last June. Sam and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If the lease had fallen below 80 years, the price would have gone up by a minimum £1,150.
In 2011 we were contacted by Mrs Kelsey López who, having moved into a garden flat in Fenstanton in November 2001. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by a further 90 years. Similar properties in Fenstanton with a long lease were worth £193,400. The average ground rent payable was £65 billed per annum. The lease terminated on 25 April 2084. Having 59 years outstanding we approximated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 not including legals.
Mrs Hollie Thomas acquired a garden apartment in Fenstanton in October 2005. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Identical flats in Fenstanton with an extended lease were worth £255,000. The average ground rent payable was £50 collected yearly. The lease ended on 14 October 2095. Having 70 years left we calculated the premium to the freeholder to extend the lease to be within £10,500 and £12,000 not including fees.