It’s a harsh truth that a Patcham 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 early years due to the loss of value being disguised by increases in the Patcham property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips below 80 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 extra value that a lease extension will add the property The majority of leasehold owners in Patcham will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated 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 in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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. |
Irrespective of whether you are a tenant or a landlord in Patcham,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Patcham valuers.
Subsequent to protracted negotiations with the landlord of her purpose-built apartment in Patcham, Naomi commenced the lease extension process as the eighty year deadline was fast coming. The transaction was concluded in September 2006. The landlord’s charges were restricted to less than 700 GBP.
Mr and Mrs. C Ali completed a purpose-built apartment in Patcham in November 2010. The dilemma was if we could approximate the premium would likely be for a ninety year lease extension. Comparable homes in Patcham with an extended lease were worth £285,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease expired on 26 November 2105. Considering the 80 years left we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of legals.
Last Summer we were contacted by Mr F Harris , who moved into a ground floor apartment in Patcham in October 2008. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Comparable properties in Patcham with an extended lease were worth £198,400. The mid-range amount of ground rent was £65 billed monthly. The lease ran out in 2084. Considering the 59 years as a residual term we estimated the premium to the landlord to extend the lease to be within £21,900 and £25,200 plus costs.