It’s an underpublicised truth that a Abbots Langley 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 loss of value being disguised by increases in the Abbots Langley property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips below eighty years, you will then be required to pay 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 extra value that a lease extension will add the property Most leasehold owners in Abbots Langley will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with handle Abbots Langley 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.
During the course of the last few months Thomas, started to get near to the 80-year threshold with the lease on his first floor flat in Abbots Langley. In buying his property twenty years previously, the lease term was of little importance. As luck would have it, he became aware that he would soon be paying an escalated premium for Extending the lease. Thomas was able to extend his lease at the eleventh hour in March. Thomas and the landlord subsequently settled on an amount of £6,000 . If he failed to meet the deadline, the sum would have increased by a minimum £1,125.
Last month we were contacted by Mrs E Simon , who completed a basement flat in Abbots Langley in August 2010. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by 90 years. Identical homes in Abbots Langley with a long lease were valued around £290,000. The mid-range amount of ground rent was £45 collected annually. The lease ended on 17 October 2098. Taking into account 73 years unexpired we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.
In 2010 we were contacted by Mr Henry Johnson who, having moved into a basement flat in Abbots Langley in May 2001. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparable residencies in Abbots Langley with an extended lease were worth £240,600. The mid-range amount of ground rent was £60 billed yearly. The lease concluded in 2087. Having 62 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 not including professional charges.