Corbridge 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. The majority of owners of residential leasehold property in Corbridge enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Corbridge you really ought to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Corbridge with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Corbridge 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.
Isaac owned a studio apartment in Corbridge being marketed with a lease of just over fifty eight years left. Isaac on an informal basis contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Isaac to invoke his statutory right. Isaac obtained expert advice and secured satisfactory deal without resorting to tribunal and readily saleable.
In 2014 we were phoned by Mr and Mrs. L Walker who, having moved into a purpose-built flat in Corbridge in April 2011. We are asked if we could estimate the price would likely be for a 90 year lease extension. Comparative premises in Corbridge with a long lease were valued around £267,600. The average amount of ground rent was £65 collected monthly. The lease lapsed on 26 March 2093. Given that there were 67 years as a residual term we calculated the premium to the landlord to extend the lease to be within £14,300 and £16,400 not including fees.
In 2012 we were called by Ms N King who, having moved into a purpose-built flat in Corbridge in November 2006. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Similar premises in Corbridge with an extended lease were valued about £201,200. The mid-range amount of ground rent was £55 invoiced per annum. The lease elapsed in 2082. Taking into account 56 years remaining we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including legals.