As the length of the unexpired term of a Box domestic lease diminished so does its value and therefore the value of your property. If the residual term has, over 99 years remaining then this decrease may be fractional however there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary rational as to why you should extend the lease without delay. The majority of flat owners in Box will meet the qualifying criteria; however a conveyancing solicitor will be able to confirm if you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Box,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Box valuers.
Trailing unsuccessful negotiations with the landlord of her basement apartment in Box, Robyn commenced the lease extension process as the 80 year threshold was quickly coming. The transaction completed in February 2008. The freeholder’s charges were negotiated to less than 700 GBP.
Mr V Thomas owned a one bedroom flat in Box in August 2001. The question was if we could approximate the premium would likely be to prolong the lease by a further 90 years. Similar homes in Box with an extended lease were worth £264,000. The average ground rent payable was £60 invoiced yearly. The lease expiry date was on 2 November 2079. Given that there were 53 years remaining we estimated the compensation to the freeholder to extend the lease to be between £37,100 and £42,800 plus costs.
In 2010 we were approached by Mr and Mrs. P Díaz who, having bought a basement apartment in Box in September 2008. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical homes in Box with a long lease were in the region of £220,400. The mid-range amount of ground rent was £45 invoiced annually. The lease concluded on 20 May 2090. Taking into account 64 years remaining we estimated the premium to the landlord to extend the lease to be within £16,200 and £18,600 exclusive of costs.