It’s an underpublicised truth that a Kelsall residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Kelsall property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term dips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to 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 The majority of leasehold owners in Kelsall will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Kelsall,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Kelsall valuers.
Following lengthy negotiations with the freeholder of her ground floor apartment in Kelsall, Amy commenced the lease extension process as the eighty year mark was quickly approaching. The transaction completed in July 2005. The landlord’s fees were kept to an absolute minimum.
Last Christmas we were contacted by Dr C González , who purchased a newly refurbished flat in Kelsall in October 1995. The question was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Comparative properties in Kelsall with a long lease were in the region of £300,000. The mid-range amount of ground rent was £50 collected annually. The lease terminated in 2099. Taking into account 75 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.
In 2014 we were e-mailed by Mr and Mrs. N Lambert who, having acquired a one bedroom apartment in Kelsall in January 2003. We are asked if we could approximate the price would be for a 90 year lease extension. Identical homes in Kelsall with a long lease were valued about £250,400. The mid-range ground rent payable was £65 billed yearly. The lease ended in 2088. Considering the 64 years remaining we calculated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 not including legals.