Unfortunately that a Adlington residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Adlington property market.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining slips under 80 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. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Adlington 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 qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| 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 conveyancers that we work with handle Adlington 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.
Last October Owen, came perilously close to the 80-year threshold with the lease on his purpose- built flat in Adlington. In buying his property two decades ago, the unexpired term was of minimal importance. Luckily, he realised he needed to take steps soon on Extending the lease. Owen extended the lease at the eleventh hour last September. Owen and the landlord subsequently settled on sum of £5,500 . If he not met the deadline, the premium would have gone up by at least £875.
In 2014 we were approached by Dr Theo Patel who, having took over the lease of a basement flat in Adlington in January 2005. The dilemma was if we could estimate the price would likely be for a ninety year extension to my lease. Comparative homes in Adlington with 100 year plus lease were worth £200,800. The average ground rent payable was £65 collected monthly. The lease concluded in 2086. Given that there were 60 years outstanding we calculated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of expenses.
Last month we were e-mailed by Mr and Mrs. D Jones , who moved into a one bedroom flat in Adlington in November 2006. The question was if we could approximate the price would likely be to extend the lease by ninety years. Similar homes in Adlington with 100 year plus lease were in the region of £255,000. The mid-range amount of ground rent was £50 billed quarterly. The lease ended in 2097. Considering the 71 years left we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.