Unfortunately that a Balby residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Balby property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher amount will be payable. The majority of flat owners in Balby will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Balby can be a difficult process. We recommend you get professional help from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Balby lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
14 months ago Mason, came dangerously near to the eighty-year threshold with the lease on his basement flat in Balby. Having bought his property twenty years previously, the lease term was of minimal interest. Thankfully, he realised he would imminently be paying an inflated amount for Extending the lease. Mason was able to extend his lease at the eleventh hour last April. Mason and the landlord ultimately agreed on a premium of £6,000 . If he failed to meet the deadline, the premium would have gone up by at least £900.
In 2014 we were e-mailed by Mr Nathaniel Cooper who, having took over the lease of a one bedroom flat in Balby in July 1996. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Comparative properties in Balby with 100 year plus lease were valued around £193,400. The average amount of ground rent was £65 collected yearly. The lease expiry date was on 12 March 2085. Taking into account 59 years remaining we estimated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of expenses.
Dr David Baker owned a one bedroom flat in Balby in November 2012. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar flats in Balby with a long lease were valued around £250,000. The average ground rent payable was £50 collected annually. The lease end date was in 2096. Having 70 years unexpired we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.