It’s an underpublicised truth that a Laindon residential lease is a deteriorating asset. The lease value drops 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 Laindon property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term falls below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Laindon will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 handle Laindon 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 conveyancer we work with provide it.
After unsuccessful negotiations with the freeholder of her basement apartment in Laindon, Louise started the lease extension process as the 80 year threshold was fast approaching. The legal work completed in May 2014. The landlord’s costs were kept to an absolute minimum.
Last Summer we were approach by Ms O Rodríguez , who was assigned a lease of a purpose-built apartment in Laindon in March 2010. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Identical flats in Laindon with 100 year plus lease were valued about £176,200. The average amount of ground rent was £65 billed quarterly. The lease ended in 2081. Given that there were 56 years unexpired we approximated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 plus costs.
Mrs Kayleigh Jones purchased a one bedroom apartment in Laindon in July 2006. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Similar flats in Laindon with an extended lease were valued about £242,600. The mid-range ground rent payable was £45 invoiced quarterly. The lease terminated in 2092. Having 67 years unexpired we calculated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 plus professional charges.