The nearer a domestic lease in Banbury gets to zero years unexpired, the the greater the reduction in the value of the property. Where the lease has, in excess of 125 years to run then this decrease may be fractional nevertheless there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the main logic behind why you should extend the lease sooner rather than later. Many flat owners in Banbury will meet the qualifying criteria; that being said a conveyancing solicitor will be able to confirm if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold residencies in Banbury with in excess of 100 years outstanding on the lease are often referred to as ‘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 upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Banbury 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 conveyancer we work with provide it.
Half a year ago John, came seriously close to the eighty-year threshold with the lease on his first floor apartment in Banbury. In buying his home two decades ago, the length of the lease was of little concern. Fortunately, he recognised he needed to take steps soon on Extending the lease. John extended the lease just in the nick of time last June. John and the freeholder in the end agreed on a premium of £5,000 . If the lease had fallen lower than 80 years, the premium would have become more costly by at least £1,150.
Mr K Gunderson owned a first floor flat in Banbury in September 2008. The dilemma was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Comparable properties in Banbury with a long lease were in the region of £290,000. The mid-range ground rent payable was £45 invoiced monthly. The lease ran out on 7 February 2097. Considering the 72 years unexpired we calculated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 exclusive of legals.
Last Spring we were approach by Dr Harrison Anderson , who took over the lease of a garden flat in Banbury in June 1995. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative residencies in Banbury with 100 year plus lease were worth £233,200. The average amount of ground rent was £60 billed quarterly. The lease finished in 2086. Considering the 61 years unexpired we estimated the premium to the freeholder for the lease extension to be between £22,800 and £26,400 plus expenses.