It’s an underpublicised truth that a Avonmouth residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Avonmouth property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will end up paying 50% of the property's 'marriage value' on top of 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 The majority of flat owners in Avonmouth will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold properties in Avonmouth with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 better control over the value of your Avonmouth leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to protracted correspondence with the landlord of her studio apartment in Avonmouth, Rosie initiated the lease extension process just as her lease was approaching the critical eighty-year threshold. The legal work completed in January 2007. The landlord’s fees were kept to an absolute minimum.
Last Winter we were phoned by Dr Jasmine Evans , who bought a purpose-built flat in Avonmouth in July 2006. The dilemma was if we could estimate the price would be to extend the lease by a further 90 years. Identical residencies in Avonmouth with an extended lease were worth £285,000. The average amount of ground rent was £55 billed yearly. The lease came to a finish on 18 November 2106. Having 80 years left we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.
Dr W Bell was assigned a lease of a ground floor apartment in Avonmouth in April 2004. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Comparative homes in Avonmouth with 100 year plus lease were valued around £200,800. The average ground rent payable was £65 invoiced quarterly. The lease lapsed in 2086. Considering the 60 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of legals.