Unfortunately that a Barrow In Furness residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Barrow In Furness property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term dips 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. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Barrow In Furness will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancing solicitors that we work with handle Barrow In Furness 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.
Last Spring Adam, came seriously close to the eighty-year threshold with the lease on his ground floor flat in Barrow In Furness. Having bought his home two decades ago, the unexpired term was of little interest. Luckily, he recognised he would soon be paying way over the odds for Extending the lease. Adam extended the lease at the eleventh hour last March. Adam and the landlord who owned the flat above eventually agreed on a premium of £6,000 . If the lease had descended to less than 80 years, the figure would have increased by at least £1,000.
Last Spring we were approach by Mr and Mrs. A Alexander , who took over the lease of a studio apartment in Barrow In Furness in November 2006. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Identical premises in Barrow In Furness with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 billed quarterly. The lease ended on 2 January 2099. Having 74 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
In 2011 we were approached by Ms Naomi Watson who, having bought a ground floor flat in Barrow In Furness in February 1998. The question was if we could approximate the premium would be for a 90 year lease extension. Similar properties in Barrow In Furness with a long lease were valued around £166,400. The average ground rent payable was £60 billed every twelve months. The lease ran out on 16 November 2079. Given that there were 54 years unexpired we calculated the premium to the landlord to extend the lease to be between £32,300 and £37,400 not including costs.