It’s a harsh truth that a Christchurch 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 first few years due to the loss of value being disguised by increases in the Christchurch property prices.Once your lease gets to 85ish years, you should 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 dips below eighty years - otherwise a higher premium will be payable. Most flat owners in Christchurch will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally accepted that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle 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 conveyancer we work with provide it.
Off the back of unsuccessful discussions with the freeholder of her ground floor flat in Christchurch, Natasha commenced the lease extension process just as her lease was approaching the crucial eighty-year mark. The transaction completed in May 2015. The landlord’s fees were kept to an absolute minimum.
In 2014 we were phoned by Mr Charlie Jackson who, having owned a one bedroom apartment in Christchurch in June 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Similar homes in Christchurch with a long lease were worth £280,000. The mid-range amount of ground rent was £55 billed quarterly. The lease elapsed in 2103. Given that there were 78 years unexpired we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of professional charges.
Last year we were approach by Mr and Mrs. Y François , who acquired a first floor flat in Christchurch in March 1998. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar premises in Christchurch with an extended lease were in the region of £186,000. The mid-range ground rent payable was £65 billed yearly. The lease concluded on 17 August 2083. Considering the 58 years left we approximated the compensation to the freeholder for the lease extension to be between £24,700 and £28,600 exclusive of professional charges.