As the length of the unexpired term of a Leven residential lease diminished so does its value and therefore the value of your property. Where the residual term has, over 100 years to run then this decrease may be fractional that being said there will become a stage when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should consider extending sooner rather than later. The majority of flat owners in Leven will qualify for this right; however a lawyer should be able to advise whether you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold premises in Leven with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| 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 handle Leven 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 lawyer we work with provide it.
George owned a conversion flat in Leven on the market with a lease of a few days over 72 years outstanding. George on an informal basis contacted his freeholder being a well known London-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were George to invoke his statutory right. George obtained expert legal guidance and secured satisfactory resolution informally and readily saleable.
Last year we were approach by Dr Molly Bonnet , who acquired a first floor apartment in Leven in August 2002. The question was if we could estimate the premium could be for a ninety year lease extension. Similar premises in Leven with an extended lease were worth £166,400. The average ground rent payable was £60 collected every twelve months. The lease elapsed on 20 November 2080. Given that there were 54 years outstanding we calculated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 exclusive of legals.
In 2014 we were called by Mrs Samantha Roberts who, having was assigned a lease of a studio flat in Leven in July 2010. We are asked if we could estimate the price could be to prolong the lease by an additional years. Similar residencies in Leven with an extended lease were in the region of £227,800. The average amount of ground rent was £45 collected per annum. The lease came to a finish in 2091. Given that there were 65 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of costs.