Grays leases on residential properties are gradually losing value. Where your lease has in the region of ninety years remaining, you should start thinking about a lease extension. If lease term is under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Grays will usually be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In certain cases you may not qualify. There are prescribed timetables and steps to comply with once the process has commenced so it’s sensible to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure 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.
Edward owned a high value apartment in Grays on the market with a lease of a few days over 59 years left. Edward informally spoke with his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 per annum. Ordinarily, ground rent would not be payable on a lease extension were Edward to exercise his statutory right. Edward obtained expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Mrs Y Fournier completed a first floor flat in Grays in April 2007. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparative properties in Grays with a long lease were worth £256,600. The average ground rent payable was £60 invoiced every twelve months. The lease terminated in 2078. Considering the 52 years remaining we calculated the compensation to the landlord for the lease extension to be within £39,000 and £45,000 not including fees.
An example of a Lease Extension matter before the tribunal 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 was in relation to 13 flats. The unexpired term was 76 years.