Owning a apartment usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Marks Gate. Clearly, the term of lease remaining reduces over time. This is often overlooked and only raises itself as an issue when the flat or house has to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Qualifying leaseholders in Marks Gate have the right to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. Please give careful consideration before putting off your Marks Gate lease extension. Putting off that expense now only increases the price you will eventually have to pay to extend your lease
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a landlord in Marks Gate,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Marks Gate valuers.
Off the back of protracted negotiations with the landlord of her garden flat in Marks Gate, Alicia commenced the lease extension process just as the lease was nearing the all-important eighty-year threshold. The legal work was finalised in June 2011. The landlord’s costs were kept to an absolute minimum.
Last month we were called by Mr and Mrs. N Kelly , who purchased a purpose-built apartment in Marks Gate in July 2006. The question was if we could estimate the price would likely be for a ninety year lease extension. Comparable residencies in Marks Gate with a long lease were worth £179,200. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease end date was on 12 September 2076. Having 51 years as a residual term we estimated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of expenses.
An example of a Lease Extension case for a Marks Gate premises is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case affected 1 flat. The unexpired term as at the valuation date was 61.36 years.