It’s an underpublicised truth that a Belford 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 first few years due to the deflation being disguised by increases in the Belford property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term dips under eighty years, you will then be required to pay half 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 additional value that a lease extension will add the property The majority of flat owners in Belford will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold premises in Belford with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your Belford leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Benjamin owned a 2 bedroom flat in Belford on the market with a lease of a little over 59 years left. Benjamin informally contacted his landlord being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Benjamin to invoke his statutory right. Benjamin obtained expert legal guidance and secured an acceptable resolution without going to tribunal and readily saleable.
Dr A Martinez moved into a one bedroom apartment in Belford in March 2004. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by an additional years. Comparative premises in Belford with a long lease were worth £193,400. The average amount of ground rent was £65 billed yearly. The lease termination date was in 2084. Having 59 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 exclusive of fees.
In 2009 we were e-mailed by Dr E Martínez who, having purchased a purpose-built flat in Belford in April 2012. The dilemma was if we could estimate the price could be to prolong the lease by ninety years. Identical homes in Belford with 100 year plus lease were in the region of £250,000. The average ground rent payable was £50 billed monthly. The lease elapsed in 2094. Having 69 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus costs.