It’s a harsh certainty that a Corbridge residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Corbridge property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Corbridge will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers 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 conveyancer we work with provide it.
Alfie was the the leasehold proprietor of a 2 bedroom apartment in Corbridge being marketed with a lease of a few days over 61 years left. Alfie informally approached his landlord being a well known London-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were Alfie to invoke his statutory right. Alfie obtained expert advice and was able to make an informed decision and handle with the matter and readily saleable.
In 2010 we were approached by Mr Finn Anderson who, having owned a purpose-built apartment in Corbridge in January 1997. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by an additional years. Similar premises in Corbridge with an extended lease were worth £252,800. The average ground rent payable was £65 invoiced every twelve months. The lease finished in 2091. Given that there were 65 years remaining we calculated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 plus costs.
In 2010 we were contacted by Mr and Mrs. U Bernard who, having purchased a first floor apartment in Corbridge in November 1996. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparative flats in Corbridge with an extended lease were in the region of £191,400. The average ground rent payable was £55 billed monthly. The lease came to a finish in 2080. Taking into account 54 years left we estimated the compensation to the freeholder for the lease extension to be between £34,200 and £39,600 exclusive of fees.