Clifton Village 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 your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Clifton Village residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Clifton Village you should see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for 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 property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Clifton Village 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.
Liam owned a high value apartment in Clifton Village being marketed with a lease of just over sixty years left. Liam on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Liam to exercise his statutory right. Liam obtained expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Last Spring we were approach by Mr and Mrs. J Laurent , who bought a ground floor apartment in Clifton Village in November 2006. We are asked if we could estimate the price would likely be for a 90 year lease extension. Identical homes in Clifton Village with 100 year plus lease were worth £237,600. The average amount of ground rent was £45 invoiced monthly. The lease ran out in 2093. Considering the 67 years unexpired we calculated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 not including expenses.
In 2013 we were approached by Dr A James who, having owned a one bedroom apartment in Clifton Village in April 2004. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Similar flats in Clifton Village with a long lease were in the region of £280,000. The average amount of ground rent was £55 collected per annum. The lease came to a finish on 18 April 2104. Given that there were 78 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.