It’s a harsh truth that a Claverdon residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Claverdon property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term slips below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to 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 The majority of leasehold owners in Claverdon will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Claverdon 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.
Off the back of protracted negotiations with the landlord of her basement apartment in Claverdon, Jasmine commenced the lease extension process just as the lease was nearing the all-important 80-year mark. The transaction was finalised in October 2014. The freeholder’s fees were kept to an absolute minimum.
Last month we were approach by Dr Theo Vincent , who moved into a one bedroom flat in Claverdon in July 1997. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Comparative flats in Claverdon with an extended lease were worth £205,000. The mid-range ground rent payable was £50 billed annually. The lease expired on 17 November 2105. Having 79 years remaining we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.
Last Autumn we were e-mailed by Mrs Eleanor Morgan , who completed a purpose-built apartment in Claverdon in March 2000. The question was if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Comparative flats in Claverdon with a long lease were valued about £275,000. The average amount of ground rent was £65 billed per annum. The lease lapsed in 2094. Considering the 68 years outstanding we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including costs.