The nearer a domestic lease in Clerkenwell nears to zero years unexpired, the more it reduces the value of the property. Where the lease has, beyond 125 years remaining then this decrease may be of little impact that being said there will become a stage when a lease has fewer than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner than later. The majority of flat owners in Clerkenwell will qualify for this right; that being said a conveyancer can confirm if you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| 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. |
| 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. |
Engaging our service gives you increased control over the value of your Clerkenwell leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months John, came critically near to the eighty-year mark with the lease on his one bedroom flat in Clerkenwell. Having bought his property 19 years ago, the length of the lease was of no interest. Fortunately, he recognised he needed to take action soon on a lease extension. John extended the lease just under the wire last June. John and the freeholder in the end settled on a premium of £6,000 . If the lease had descended below 80 years, the figure would have escalated by at least £1,150.
In 2011 we were approached by Dr J Davis who, having took over the lease of a first floor flat in Clerkenwell in May 1998. The question was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by a further 90 years. Comparative homes in Clerkenwell with an extended lease were worth £208,200. The average ground rent payable was £65 invoiced per annum. The lease concluded on 19 February 2087. Taking into account 61 years unexpired we approximated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 exclusive of legals.
An example of a Lease Extension decision for a Clerkenwell residence is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case related to 1 flat. The unexpired term was 66.8 years.