It’s an underpublicised truth that a Grays 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 early years due to the reduction being disguised by increases in the Grays property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term drops below 80 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. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Grays will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated 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 over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 conveyancing solicitors that we work with undertake Grays 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.
Ibrahim owned a studio apartment in Grays on the market with a lease of just over sixty years outstanding. Ibrahim informally contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Ibrahim to exercise his statutory right. Ibrahim obtained expert advice and secured an acceptable deal without resorting to tribunal and readily saleable.
Last month we were contacted by Ms Georgia Bernard , who owned a garden flat in Grays in April 2007. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical homes in Grays with 100 year plus lease were worth £285,000. The average amount of ground rent was £55 invoiced annually. The lease concluded in 2105. Taking into account 79 years remaining we estimated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including expenses.
An example of a Lease Extension case for a Grays flat is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case affected 13 flats. The number of years remaining on the existing lease(s) was 76 years.