Colchester leases on residential deteriorating in value. Where your lease has approximately 90 years left, you should start considering the need for a lease extension. If lease term falls under 80 years, you will then have to pay 50% 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 additional value that a lease extension will add to the property. Flat owners in Colchester will usually qualify for a lease extension; however a solicitor should be able check if you qualify. In some circumstances you may not be entitled. There are also strict timetables and steps to comply with once the process is triggered so it’s wise to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Using our service will provide you better control over the value of your Colchester leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Leo was the the leasehold proprietor of a 2 bedroom flat in Colchester on the market with a lease of a few days over fifty eight years outstanding. Leo informally contacted his freeholder a well known London-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert advice and was able to make a more informed decision and deal with the matter and sell the property.
Last Winter we were called by Mr and Mrs. O Ward , who acquired a studio flat in Colchester in May 2011. The question was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by ninety years. Comparative properties in Colchester with a long lease were in the region of £280,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease elapsed on 26 November 2102. Given that there were 77 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of expenses.
Last Summer we were e-mailed by Dr V Patel , who moved into a first floor flat in Colchester in February 1999. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Comparative premises in Colchester with 100 year plus lease were in the region of £183,600. The mid-range ground rent payable was £65 invoiced per annum. The lease elapsed in 2082. Having 57 years remaining we calculated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 not including professional charges.