Clayhall 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 Clayhall enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Clayhall you would be well advised to investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Engaging our service will provide you better control over the value of your Clayhall leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Jackson, started to get close to the eighty-year mark with the lease on his two bedroom flat in Clayhall. Having bought his property 19 years ago, the unexpired term was of little bearing. As luck would have it, it dawned on him that he would soon be paying an inflated amount for Extending the lease. Jackson arranged for a lease extension just under the wire last September. Jackson and the landlord who owned the flat above in the end settled on the final figure of £5,500 . If he failed to meet the deadline, the amount would have become more exhorbitant by at least £1,025.
Last Winter we were contacted by Dr M Rodríguez , who acquired a one bedroom flat in Clayhall in September 2000. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Identical residencies in Clayhall with an extended lease were worth £174,200. The average amount of ground rent was £55 billed yearly. The lease expired in 2076. Taking into account 51 years unexpired we calculated the premium to the landlord for the lease extension to be between £31,400 and £36,200 plus fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Clayhall property is 59 & 59a Clarendon Gardens in February 2014. The Tribunals valuation for the freehold was £30,073.00 The remaining number of years on the lease was 65 and 61.