Unfortunately that a Greenfield residential lease is a deteriorating 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 Greenfield property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term dips under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Greenfield will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is generally accepted that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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 marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Jacob, came dangerously close to the eighty-year threshold with the lease on his basement flat in Greenfield. Having purchased his flat two decades ago, the length of the lease was of little significance. by good luck, it dawned on him that he would soon be paying way over the odds for a lease extension. Jacob was able to extend his lease just under the wire in March. Jacob and the freeholder via the management company subsequently settled on the final figure of £6,000 . If the lease had slipped to less than 80 years, the figure would have gone up by at least £1,000.
In 2012 we were phoned by Dr C Lee who, having purchased a basement apartment in Greenfield in September 2006. The question was if we could estimate the price could be for a 90 year extension to my lease. Identical flats in Greenfield with 100 year plus lease were valued about £255,000. The mid-range amount of ground rent was £50 collected yearly. The lease expired in 2096. Taking into account 70 years unexpired we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.
Last year we were called by Mr and Mrs. G Khan , who owned a ground floor apartment in Greenfield in June 1997. The question was if we could estimate the price could be for a ninety year extension to my lease. Comparable properties in Greenfield with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 invoiced monthly. The lease concluded on 21 August 2076. Having 50 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 not including legals.