It’s an underpublicised certainty that a Adderbury 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 depreciation being disguised by increases in the Adderbury property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term falls under 80 years, you will then be required to pay 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 flat owners in Adderbury 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 qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold properties in Adderbury with in excess of 100 years left on the lease are often regarded as a ‘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 freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| Birmingham Midshires | 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 be at least 30 years plus the term of the mortgage at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Adderbury,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Adderbury valuers.
Last year Stanley, came critically near to the 80-year mark with the lease on his first floor flat in Adderbury. In buying his property two decades ago, the lease term was of no concern. by good luck, he noticed he needed to take steps soon on a lease extension. Stanley was able to extend his lease at the eleventh hour in April. Stanley and the landlord ultimately agreed on the final figure of £5,500 . If he had missed the deadline, the amount would have become more exhorbitant by a minimum £1,000.
In 2013 we were approached by Dr Riley Adams who, having completed a basement flat in Adderbury in October 2008. The question was if we could estimate the price would be for a 90 year lease extension. Identical residencies in Adderbury with an extended lease were worth £200,800. The mid-range amount of ground rent was £65 billed annually. The lease finished on 2 July 2086. Taking into account 60 years as a residual term we estimated the premium to the landlord for the lease extension to be between £20,900 and £24,200 not including costs.
In 2013 we were e-mailed by Mr and Mrs. K Green who, having bought a basement flat in Adderbury in January 2011. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Identical flats in Adderbury with a long lease were in the region of £260,000. The average ground rent payable was £50 collected annually. The lease expiry date was on 15 April 2097. Having 71 years as a residual term we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus fees.