Unfortunately that a Longford residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Longford property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term dips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Longford 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 timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Longford with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Longford 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 wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Alexander, came precariously near to the eighty-year threshold with the lease on his studio apartment in Longford. Having purchased his flat two decades ago, the length of the lease was of little relevance. Luckily, it dawned on him that he would soon be paying an inflated amount for a lease extension. Alexander extended the lease just ahead of time last May. Alexander and the freeholder via the managing agents in the end agreed on sum of £5,000 . If the lease had slid to less than eighty years, the amount would have escalated by at least £1,100.
Dr J Martínez was assigned a lease of a one bedroom flat in Longford in February 2011. The dilemma was if we could estimate the price would likely be to extend the lease by ninety years. Identical flats in Longford with 100 year plus lease were worth £173,800. The average ground rent payable was £60 billed quarterly. The lease expired on 25 September 2080. Given that there were 55 years left we calculated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of professional charges.
An example of a Freehold Enfranchisement case for a Longford premises is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case affected 2 flats. The unexpired term as at the valuation date was 69 years.