It’s a harsh truth that a Neston residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Neston property market.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Neston will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Neston with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Neston 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 conveyancing solicitor we work with provide it.
Following unsuccessful correspondence with the freeholder of her basement apartment in Neston, Danielle commenced the lease extension process just as the lease was nearing the critical eighty-year mark. The lease extension was finalised in May 2014. The landlord’s charges were kept to an absolute minimum.
In 2014 we were phoned by Mr and Mrs. W Watson who, having bought a purpose-built apartment in Neston in November 2012. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by a further 90 years. Identical flats in Neston with 100 year plus lease were worth £290,000. The mid-range ground rent payable was £45 collected every twelve months. The lease end date was in 2099. Given that there were 73 years unexpired we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of fees.
In 2011 we were approached by Mr U Patel who, having acquired a recently refurbished apartment in Neston in May 2011. The question was if we could estimate the premium would be for a 90 year lease extension. Comparative premises in Neston with a long lease were valued about £240,600. The mid-range ground rent payable was £60 invoiced quarterly. The lease lapsed in 2088. Given that there were 62 years left we approximated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 plus professional charges.