The closer a residential lease in Colchester gets to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, over one hundred years remaining then this decrease may be fractional nevertheless there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner as opposed to later. Many flat owners in Colchester will meet the qualifying criteria; nevertheless a conveyancer should be able to advise whether you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Colchester 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 lawyer we work with provide it.
Last year Luke, started to get near to the 80-year threshold with the lease on his ground floor apartment in Colchester. Having bought his flat two decades ago, the lease term was of little importance. Fortunately, it dawned on him that he needed to take steps soon on a lease extension. Luke extended the lease just in the nick of time last January. Luke and the freeholder via the managing agents ultimately agreed on sum of £6,000 . If the lease had descended to less than eighty years, the premium would have gone up by a minimum £875.
In 2012 we were e-mailed by Mr and Mrs. A Díaz who, having took over the lease of a basement flat in Colchester in July 2007. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Comparable properties in Colchester with a long lease were in the region of £255,000. The mid-range amount of ground rent was £50 billed yearly. The lease came to a finish on 4 June 2096. Given that there were 70 years remaining we calculated the compensation to the landlord for the lease extension to be between £10,500 and £12,000 exclusive of fees.
Last month we were called by Mr and Mrs. P Bailey , who owned a basement apartment in Colchester in July 2010. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Similar properties in Colchester with an extended lease were in the region of £246,800. The average ground rent payable was £60 invoiced every twelve months. The lease finished on 5 May 2076. Considering the 50 years remaining we estimated the premium to the freeholder for the lease extension to be within £44,700 and £51,600 exclusive of fees.