As the length of the unexpired term of a Portland residential lease decreases so does its value and therefore the value of your property. If the residual term has, over one hundred years remaining then this decrease may be fractional nevertheless there will become a point in time when a lease has less than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary reason why you should consider extending sooner than later. The majority of flat owners in Portland will meet the qualifying criteria; nevertheless a conveyancing solicitor can advise if you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold residencies in Portland with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
Engaging our service gives you increased control over the value of your Portland leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Alexander owned a 2 bedroom flat in Portland on the market with a lease of a little over 61 years outstanding. Alexander on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be due on a lease extension were Alexander to invoke his statutory right. Alexander obtained expert advice and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
In 2014 we were e-mailed by Dr Jayden Girard who, having purchased a recently refurbished flat in Portland in June 1995. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by a further 90 years. Comparative properties in Portland with an extended lease were worth £264,000. The average ground rent payable was £60 billed every twelve months. The lease ran out in 2078. Having 53 years left we calculated the compensation to the landlord for the lease extension to be between £37,100 and £42,800 exclusive of professional charges.
Mr and Mrs. H Cox owned a one bedroom apartment in Portland in February 2012. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Similar flats in Portland with a long lease were worth £225,400. The average ground rent payable was £45 invoiced monthly. The lease terminated on 24 November 2089. Considering the 64 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 plus professional charges.