It’s a harsh certainty that a Long Eaton residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Long Eaton property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term drops under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Long Eaton will be able to extend under the legislation; however a lawyer 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 conveyancer throughout the process.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Long Eaton leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Joshua owned a 2 bedroom flat in Long Eaton being marketed with a lease of a few days over 72 years remaining. Joshua informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 per annum. No ground rent would be payable on a lease extension were Joshua to exercise his statutory right. Joshua obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Mr and Mrs. V Patel was assigned a lease of a newly refurbished flat in Long Eaton in October 2004. We are asked if we could shed any light on how much (approximately) price would be to prolong the lease by ninety years. Comparable flats in Long Eaton with 100 year plus lease were valued around £205,000. The mid-range ground rent payable was £50 invoiced annually. The lease expiry date was on 13 January 2105. Given that there were 79 years as a residual term we calculated the premium to the landlord to extend the lease to be between £7,600 and £8,800 not including fees.
Last Autumn we were e-mailed by Mr Kian Howard , who purchased a newly refurbished flat in Long Eaton in October 2003. The question was if we could shed any light on how much (roughly) price could be to extend the lease by a further 90 years. Similar flats in Long Eaton with 100 year plus lease were valued around £275,000. The average amount of ground rent was £65 invoiced every twelve months. The lease ran out in 2094. Having 68 years unexpired we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including legals.