Keswick leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Keswick residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Keswick you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold properties in Keswick with in excess of one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 conveyancing solicitors that we work with undertake Keswick 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.
Jasper owned a 2 bedroom apartment in Keswick being sold with a lease of a few days over 59 years remaining. Jasper informally spoke with his landlord a well known local-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Jasper to invoke his statutory right. Jasper procured expert legal guidance and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Ms Naomi Thompson acquired a purpose-built apartment in Keswick in August 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by 90 years. Comparable premises in Keswick with an extended lease were valued about £210,600. The average ground rent payable was £45 invoiced yearly. The lease elapsed in 2088. Considering the 62 years as a residual term we estimated the premium to the landlord to extend the lease to be within £18,100 and £20,800 not including fees.
In 2010 we were contacted by Ms D Rivera who, having acquired a purpose-built apartment in Keswick in August 2002. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical residencies in Keswick with an extended lease were valued about £265,000. The mid-range ground rent payable was £50 invoiced per annum. The lease elapsed in 2099. Having 73 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of expenses.