Common Edge 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 the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Common Edge residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Common Edge you must see if your lease has between 70 and 90 years left. There are good reasons why a Common Edge leaseholder with a lease having around 80 years left should take steps to ensure that a lease extension is put in place without delay
It is generally accepted that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Lease extensions in Common Edge can be a difficult process. We recommend you get guidance 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 Common Edge lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Luca, started to get close to the eighty-year mark with the lease on his purpose- built apartment in Common Edge. Having bought his home two decades ago, the lease term was of no relevance. Fortunately, he became aware that he would soon be paying an escalated premium for a lease extension. Luca arranged for a lease extension just under the wire last June. Luca and the landlord who owned the flat above in the end settled on sum of £5,000 . If he had missed the deadline, the figure would have gone up by at least £1,000.
Last month we were contacted by Mr Michael James , who owned a studio flat in Common Edge in June 2008. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Identical premises in Common Edge with an extended lease were in the region of £260,000. The mid-range ground rent payable was £50 collected annually. The lease finished in 2098. Considering the 72 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
Dr Cameron Moore was assigned a lease of a studio apartment in Common Edge in March 2003. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Identical flats in Common Edge with 100 year plus lease were worth £256,600. The mid-range ground rent payable was £60 billed annually. The lease elapsed in 2078. Considering the 52 years left we estimated the premium to the landlord to extend the lease to be between £39,000 and £45,000 plus costs.