Clowne leases on domestic properties are gradually losing value. if your lease has in the region of 90 years remaining, you should start considering the need for a lease extension. An important point to note is that it is desirable for your lease extension to be in place before the term of the current lease falls below eighty years - otherwise a higher amount will be due. Leasehold owners in Clowne will usually qualify for a lease extension; however It would be wise to check with a conveyancer to confirm if you qualify. In some cases you may not qualify. There are prescribed timetables and formalities to follow once the process has commenced so it’s sensible to be guided by a lawyer during the process.
It is conventional wisdom that a property 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 worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a landlord in Clowne,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Clowne valuers.
Callum owned a studio flat in Clowne on the market with a lease of just over 59 years unexpired. Callum on an informal basis contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Callum to exercise his statutory right. Callum procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr Aiden Bertrand moved into a basement flat in Clowne in September 2008. The dilemma was if we could approximate the premium would likely be to extend the lease by 90 years. Comparable properties in Clowne with an extended lease were valued about £280,000. The average amount of ground rent was £45 billed monthly. The lease ended in 2096. Taking into account 70 years outstanding we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including fees.
Ms Tia Kelly moved into a ground floor apartment in Clowne in March 2007. We are asked if we could shed any light on how much (roughly) price could be to prolong the lease by 90 years. Identical flats in Clowne with 100 year plus lease were in the region of £223,400. The mid-range amount of ground rent was £60 collected monthly. The lease came to a finish in 2085. Having 59 years outstanding we approximated the premium to the landlord for the lease extension to be between £27,600 and £31,800 not including professional charges.