Unfortunately that a Colne residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Colne property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining falls under 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Colne will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the process.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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 |
Lease extensions in Colne can be a difficult process. We recommend you procure professional help from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Colne lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Hugo was the the leasehold proprietor of a high value apartment in Colne being sold with a lease of fraction over 61 years remaining. Hugo on an informal basis approached his freeholder a well known local-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Hugo to exercise his statutory right. Hugo obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the flat.
Mr and Mrs. O Walker took over the lease of a one bedroom flat in Colne in October 1997. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparable flats in Colne with 100 year plus lease were valued about £233,200. The average ground rent payable was £60 collected every twelve months. The lease came to a finish on 16 March 2086. Taking into account 61 years as a residual term we estimated the premium to the landlord to extend the lease to be within £22,800 and £26,400 exclusive of expenses.
In 2014 we were contacted by Mr and Mrs. G Parker who, having acquired a garden apartment in Colne in March 2006. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical residencies in Colne with 100 year plus lease were in the region of £171,800. The average ground rent payable was £55 collected yearly. The lease terminated in 2075. Considering the 50 years unexpired we calculated the premium to the landlord to extend the lease to be within £33,300 and £38,400 not including costs.