Unfortunately that a Greenfield residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Greenfield property market.Once your lease nears 85ish years, you should start considering a lease extension. If lease term drops under 80 years, you will end up paying 50% of the property's 'marriage value' on top of 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 leasehold owners in Greenfield will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not qualify. 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 conveyancer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 conveyancers that we work with procure Greenfield 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.
Off the back of protracted discussions with the freeholder of her leasehold apartment in Greenfield, Georgina initiated the lease extension process as the 80 year deadline was rapidly nearing. The legal work was finalised in May 2011. The landlord’s costs were kept to an absolute minimum.
In 2013 we were called by Ms Alexandra Mercier who, having took over the lease of a purpose-built apartment in Greenfield in July 2010. We are asked if we could estimate the price would be for a 90 year lease extension. Comparative properties in Greenfield with 100 year plus lease were valued about £200,800. The average ground rent payable was £65 collected every twelve months. The lease concluded on 1 August 2085. Given that there were 60 years left we estimated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of professional charges.
In 2014 we were contacted by Dr U Evans who, having moved into a first floor flat in Greenfield in March 2012. The dilemma was if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Identical residencies in Greenfield with an extended lease were worth £255,000. The mid-range ground rent payable was £50 invoiced per annum. The lease ended on 28 April 2096. Taking into account 71 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.