Unfortunately that a Boston residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Boston property prices.Where your lease has approximately ninety 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' 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 flat owners in Boston will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Retaining our service will provide you enhanced control over the value of your Boston leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy negotiations with the landlord of her two bedroom apartment in Boston, Rosie started the lease extension process as the eighty year deadline was swiftly approaching. The transaction was finalised in August 2011. The landlord’s fees were kept to an absolute minimum.
Last Spring we were phoned by Mr and Mrs. A Green , who purchased a ground floor flat in Boston in January 1999. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparative flats in Boston with a long lease were valued around £200,800. The mid-range ground rent payable was £65 billed yearly. The lease expired in 2086. Given that there were 60 years outstanding we approximated the premium to the freeholder for the lease extension to be between £20,900 and £24,200 plus legals.
In 2012 we were contacted by Mr F García who, having acquired a one bedroom apartment in Boston in April 1995. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Comparable premises in Boston with a long lease were valued around £255,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease finished on 10 July 2097. Having 71 years unexpired we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.