Clarborough leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Most owners of residential leasehold property in Clarborough enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Clarborough you really ought to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Clarborough with more than one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Clarborough 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.
14 months ago Ryan, started to get close to the eighty-year mark with the lease on his garden apartment in Clarborough. In buying his property two decades ago, the length of the lease was of minimal significance. As luck would have it, he became aware that he would soon be paying an escalated premium for Extending the lease. Ryan was able to extend his lease just ahead of time in April. Ryan and the freeholder via the management company subsequently settled on an amount of £6,000 . If the lease had fallen lower than 80 years, the sum would have gone up by at least £1,050.
In 2013 we were called by Ms Erin Pérez who, having bought a studio flat in Clarborough in February 1998. The dilemma was if we could shed any light on how much (approximately) price would likely be to extend the lease by a further 90 years. Identical residencies in Clarborough with a long lease were valued about £275,000. The average amount of ground rent was £65 collected monthly. The lease ran out in 2093. Considering the 68 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of costs.
Last Winter we were called by Mr O Martin , who purchased a one bedroom apartment in Clarborough in August 2004. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Identical properties in Clarborough with 100 year plus lease were worth £208,600. The mid-range amount of ground rent was £60 collected quarterly. The lease concluded on 5 March 2082. Having 57 years unexpired we approximated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 not including legals.