It’s a harsh certainty that a Christchurch residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Christchurch property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Christchurch will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety 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 |
|---|---|
| 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 are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with undertake Christchurch 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 conveyancing solicitor we work with provide it.
Jamie was the the leasehold owner of a 2 bedroom flat in Christchurch being marketed with a lease of just over sixty years unexpired. Jamie on an informal basis spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Jamie to exercise his statutory right. Jamie obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Last Autumn we were contacted by Mr and Mrs. S Patel , who owned a purpose-built flat in Christchurch in May 1995. We are asked if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Comparable properties in Christchurch with a long lease were in the region of £203,200. The average amount of ground rent was £65 collected every twelve months. The lease end date was on 24 October 2087. Having 61 years remaining we approximated the compensation to the landlord for the lease extension to be between £20,000 and £23,000 exclusive of expenses.
In 2014 we were called by Mr and Mrs. P Torres who, having moved into a recently refurbished apartment in Christchurch in September 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative properties in Christchurch with a long lease were valued around £260,000. The average amount of ground rent was £50 billed yearly. The lease concluded in 2098. Having 72 years remaining we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.