Grays leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Grays enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Grays you really ought to see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Grays with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers 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 conveyancer we work with provide it.
Evan was the the leasehold owner of a 2 bedroom flat in Grays on the market with a lease of fraction over fifty eight years remaining. Evan on an informal basis contacted his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £200 annually. No ground rent would be due on a lease extension were Evan to exercise his statutory right. Evan procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2013 we were approached by Dr N Pérez who, having bought a garden apartment in Grays in November 1995. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by an additional years. Comparative flats in Grays with an extended lease were valued about £260,000. The average amount of ground rent was £50 collected quarterly. The lease terminated on 21 January 2097. Having 72 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including fees.
An example of a Lease Extension decision 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 unexpired term was 76 years.