It’s a harsh truth that a Liskeard residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Liskeard property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Liskeard will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines 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 conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service gives you enhanced control over the value of your Liskeard leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Leon was the the leasehold owner of a 2 bedroom flat in Liskeard being marketed with a lease of just over 61 years outstanding. Leon informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Leon to invoke his statutory right. Leon obtained expert legal guidance and was able to make a more informed decision and handle with the matter and sell the flat.
Last Autumn we were approach by Mr and Mrs. L Petit , who owned a purpose-built apartment in Liskeard in April 2001. The question was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Similar homes in Liskeard with a long lease were valued about £285,000. The average amount of ground rent was £55 billed monthly. The lease terminated on 21 May 2104. Considering the 79 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus professional charges.
Last Autumn we were e-mailed by Mr and Mrs. A Morel , who owned a first floor apartment in Liskeard in September 2011. The question was if we could approximate the premium would likely be to prolong the lease by ninety years. Comparable properties in Liskeard with an extended lease were in the region of £198,400. The average ground rent payable was £65 collected every twelve months. The lease lapsed on 6 October 2084. Taking into account 59 years remaining we calculated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 not including fees.