Boston leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Boston residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Boston you must see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Boston with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth 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 estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Yorkshire 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. |
Lease extensions in Boston can be a difficult process. We recommend you obtain guidance 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 a wealth of experience procuring Boston lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Kyle owned a conversion flat in Boston on the market with a lease of just over sixty years remaining. Kyle informally contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 yearly. No ground rent would be payable on a lease extension were Kyle to exercise his statutory right. Kyle procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
In 2012 we were called by Ms I Richardson who, having acquired a one bedroom flat in Boston in October 2001. We are asked if we could approximate the price could be for a 90 year extension to my lease. Comparable properties in Boston with 100 year plus lease were in the region of £218,000. The mid-range amount of ground rent was £45 collected monthly. The lease ran out on 10 August 2089. Having 63 years outstanding we calculated the compensation to the landlord for the lease extension to be between £17,100 and £19,800 plus fees.
Last Christmas we were phoned by Ms Francesca Lee , who took over the lease of a first floor flat in Boston in September 2011. The question was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparable flats in Boston with an extended lease were in the region of £265,000. The mid-range ground rent payable was £50 invoiced annually. The lease came to a finish in 2100. Given that there were 74 years as a residual term we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.