It’s a harsh certainty that a Leven residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Leven property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term dips under eighty years, you will end up paying half 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 extra value that a lease extension will add the property Most leasehold owners in Leven will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| 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. |
| 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 Leven,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Leven valuers.
Aiden owned a 2 bedroom apartment in Leven on the market with a lease of just over 59 years outstanding. Aiden informally contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Aiden to invoke his statutory right. Aiden obtained expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Mr and Mrs. E Girard purchased a basement flat in Leven in August 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by an additional years. Identical premises in Leven with an extended lease were in the region of £255,000. The mid-range ground rent payable was £50 collected every twelve months. The lease came to a finish in 2095. Given that there were 71 years unexpired we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.
In 2014 we were phoned by Mr Ben Mason who, having took over the lease of a newly refurbished apartment in Leven in April 2005. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparable properties in Leven with an extended lease were valued about £254,200. The average amount of ground rent was £60 billed annually. The lease came to a finish on 15 September 2075. Having 51 years remaining we calculated the compensation to the landlord to extend the lease to be within £43,700 and £50,600 plus legals.