Greenfield leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Greenfield enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Greenfield you would be well advised to check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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 are not acceptable. 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; |
| 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. |
| 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 |
Using our service will provide you enhanced control over the value of your Greenfield leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted negotiations with the landlord of her leasehold flat in Greenfield, Robyn commenced the lease extension process just as her lease was coming close to the critical 80-year threshold. The legal work completed in June 2006. The landlord’s charges were kept to an absolute minimum.
Mr T Smith was assigned a lease of a garden apartment in Greenfield in February 2008. The question was if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Comparative flats in Greenfield with 100 year plus lease were worth £186,000. The mid-range amount of ground rent was £65 billed yearly. The lease end date was on 23 November 2084. Considering the 58 years outstanding we calculated the compensation to the landlord for the lease extension to be within £24,700 and £28,600 not including fees.
In 2011 we were e-mailed by Dr P Hall who, having completed a purpose-built apartment in Greenfield in February 1999. The dilemma was if we could shed any light on how much (roughly) price would be to extend the lease by 90 years. Identical flats in Greenfield with a long lease were in the region of £250,000. The average amount of ground rent was £50 billed per annum. The lease expired on 14 January 2095. Taking into account 69 years remaining we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.