Benfleet leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Benfleet tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Benfleet you must see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Benfleet with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| 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; |
| 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. |
| 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. |
The lawyers that we work with procure Benfleet 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.
Off the back of unsuccessful negotiations with the landlord of her two bedroom apartment in Benfleet, Emma started the lease extension process as the eighty year deadline was rapidly advancing. The transaction was finalised in October 2012. The landlord’s fees were restricted to a tad over 600 GBP.
Last Spring we were approach by Dr Caleb Phillips , who took over the lease of a one bedroom apartment in Benfleet in January 2009. The question was if we could approximate the premium could be to extend the lease by an additional years. Identical properties in Benfleet with 100 year plus lease were worth £218,000. The average ground rent payable was £45 collected quarterly. The lease concluded on 1 March 2089. Considering the 63 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £17,100 and £19,800 exclusive of fees.
In 2012 we were contacted by Mr Thomas David who, having completed a first floor flat in Benfleet in January 1995. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Identical residencies in Benfleet with 100 year plus lease were in the region of £270,000. The mid-range amount of ground rent was £55 invoiced quarterly. The lease came to a finish on 2 August 2100. Having 74 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.