Unfortunately that a Carnforth residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Carnforth property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Carnforth will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the process.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you increased control over the value of your Carnforth leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Jason, started to get near to the eighty-year mark with the lease on his leasehold flat in Carnforth. In buying his home 18 years previously, the unexpired term was of little significance. by good luck, he recognised he would soon be paying an inflated amount for Extending the lease. Jason arranged for a lease extension just under the wire in January. Jason and the freeholder subsequently settled on sum of £5,000 . If the lease had descended to less than eighty years, the amount would have escalated by a minimum £950.
In 2013 we were called by Mr and Mrs. O Lee who, having bought a first floor apartment in Carnforth in August 2011. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Comparable homes in Carnforth with an extended lease were valued about £208,600. The average ground rent payable was £60 invoiced every twelve months. The lease ran out in 2083. Given that there were 57 years outstanding we approximated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 plus fees.
Last Spring we were called by Dr Toby Phillips , who was assigned a lease of a garden flat in Carnforth in July 1999. The dilemma was if we could approximate the premium would be to extend the lease by 90 years. Comparative flats in Carnforth with an extended lease were in the region of £200,000. The mid-range ground rent payable was £50 collected yearly. The lease terminated on 21 August 2103. Considering the 77 years remaining we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus professional charges.