There is no doubt about it a leasehold property in Formby is a wasting asset as a result of the diminishing lease term. Where the residual term has, over 125 years remaining then this decrease may be negligible nevertheless there will become a stage when a lease has under than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease without delay. Most flat owners in Formby will qualify for this right; that being said a lawyer can advise if you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
Retaining our service gives you enhanced control over the value of your Formby leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy correspondence with the freeholder of her ground floor flat in Formby, Jodie started the lease extension process just as her lease was approaching the all-important 80-year mark. The lease extension was finalised in November 2009. The landlord’s fees were kept to an absolute minimum.
Mr Omar Campbell purchased a one bedroom apartment in Formby in January 2010. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by an additional years. Similar properties in Formby with 100 year plus lease were valued around £285,000. The mid-range amount of ground rent was £55 collected per annum. The lease finished on 8 April 2103. Considering the 79 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of legals.
In 2013 we were called by Dr Liam Adams who, having took over the lease of a garden apartment in Formby in March 2007. We are asked if we could approximate the price could be for a 90 year lease extension. Comparable flats in Formby with 100 year plus lease were worth £193,400. The average ground rent payable was £65 collected yearly. The lease expiry date was on 2 January 2083. Considering the 59 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £21,900 and £25,200 not including professional charges.