Unfortunately that a Childwall residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Childwall property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term drops below 80 years, you will then be required to pay 50% 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 leasehold owners in Childwall will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold residencies in Childwall with in excess of 100 years outstanding 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 circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
The conveyancers that we work with handle Childwall 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.
Following protracted discussions with the freeholder of her basement flat in Childwall, Tia commenced the lease extension process as the 80 year threshold was fast nearing. The lease extension was finalised in October 2011. The freeholder’s charges were negotiated to approximately four hundred GBP.
In 2012 we were phoned by Dr Finley Parker who, having took over the lease of a garden flat in Childwall in September 1995. We are asked if we could approximate the price would be to prolong the lease by ninety years. Similar flats in Childwall with a long lease were worth £200,800. The average amount of ground rent was £65 invoiced monthly. The lease ran out on 4 May 2086. Given that there were 60 years as a residual term we approximated the premium to the landlord to extend the lease to be between £20,900 and £24,200 plus professional charges.
Ms C Simon acquired a one bedroom apartment in Childwall in April 2002. We are asked if we could approximate the price would be to prolong the lease by an additional years. Similar residencies in Childwall with a long lease were valued about £255,000. The average amount of ground rent was £50 collected every twelve months. The lease expiry date was in 2097. Taking into account 71 years unexpired we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.