Unfortunately that a Clare residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Clare property prices.Where your lease has approximately 90 years left, you need to start considering 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 below eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Clare will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold premises in Clare with over one hundred years unexpired 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 situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you increased control over the value of your Clare leasehold, as your property will be more valuable and marketable in terms of 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.
In recent months John, started to get near to the eighty-year threshold with the lease on his leasehold apartment in Clare. In buying his flat two decades ago, the unexpired term was of minimal significance. Fortunately, he realised he needed to take steps soon on Extending the lease. John extended the lease just under the wire last April. John and the freeholder ultimately agreed on a premium of £6,000 . If the lease had dipped below 80 years, the figure would have gone up by at least £1,025.
In 2014 we were e-mailed by Dr Arthur Moreau who, having completed a first floor apartment in Clare in August 1997. The dilemma was if we could estimate the price could be for a 90 year lease extension. Comparative premises in Clare with an extended lease were valued around £267,600. The mid-range amount of ground rent was £65 invoiced monthly. The lease elapsed on 1 September 2092. Given that there were 67 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £14,300 and £16,400 exclusive of professional charges.
Last month we were approach by Mr Jason Vincent , who acquired a ground floor flat in Clare in July 1997. We are asked if we could shed any light on how much (approximately) price would likely be to extend the lease by an additional years. Similar properties in Clare with an extended lease were worth £206,200. The average amount of ground rent was £60 collected monthly. The lease ended in 2081. Having 56 years as a residual term we approximated the premium to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of fees.