Cookley 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 your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Cookley residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Cookley you would be well advised to check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 undertake Cookley 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.
Toby owned a studio apartment in Cookley being marketed with a lease of a few days over fifty eight years remaining. Toby informally approached his landlord being a well known Manchester-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 on the basis of a rise in the rent to £100 yearly. No ground rent would be due on a lease extension were Toby to exercise his statutory right. Toby procured expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
Last year we were phoned by Dr R García , who acquired a first floor apartment in Cookley in November 2000. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical premises in Cookley with 100 year plus lease were worth £200,800. The average ground rent payable was £65 billed every twelve months. The lease ended in 2085. Considering the 60 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of professional charges.
Mrs Sian Jones moved into a one bedroom apartment in Cookley in February 1998. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Identical homes in Cookley with 100 year plus lease were worth £255,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease terminated in 2096. Given that there were 71 years unexpired we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.