It’s a harsh truth that a Congleton residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Congleton property prices.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining dips under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Congleton will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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 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; |
| 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. |
The conveyancing solicitors that we work with procure Congleton 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 conveyancing solicitor we work with provide it.
Hunter was the the leasehold proprietor of a studio flat in Congleton on the market with a lease of just over 61 years remaining. Hunter on an informal basis approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Hunter to exercise his statutory right. Hunter obtained expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2009 we were e-mailed by Mr and Mrs. K Cox who, having took over the lease of a one bedroom flat in Congleton in August 2001. The dilemma was if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Comparative flats in Congleton with 100 year plus lease were valued about £275,000. The average amount of ground rent was £55 billed monthly. The lease terminated in 2103. Having 77 years left we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of costs.
Last Christmas we were e-mailed by Mr Thomas Ramírez , who owned a one bedroom flat in Congleton in February 1998. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Identical properties in Congleton with 100 year plus lease were worth £183,600. The average amount of ground rent was £65 collected quarterly. The lease came to a finish in 2083. Considering the 57 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 plus legals.