It’s a harsh certainty that a Corsham residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Corsham property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term drops below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Corsham will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent 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 in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with undertake Corsham 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.
Teddy owned a studio apartment in Corsham being marketed with a lease of just over 61 years unexpired. Teddy on an informal basis contacted his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Teddy to exercise his statutory right. Teddy procured expert advice and secured satisfactory resolution informally and sell the flat.
Last year we were called by Mr and Mrs. W Clark , who completed a purpose-built flat in Corsham in February 2002. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by ninety years. Comparable premises in Corsham with a long lease were worth £290,000. The mid-range ground rent payable was £45 collected quarterly. The lease terminated in 2098. Having 73 years left we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.
In 2014 we were called by Mr and Mrs. D Wilson who, having was assigned a lease of a newly refurbished flat in Corsham in January 2011. We are asked if we could approximate the price could be to extend the lease by a further 90 years. Comparative properties in Corsham with 100 year plus lease were in the region of £240,600. The average ground rent payable was £65 collected monthly. The lease ended in 2087. Given that there were 62 years unexpired we estimated the premium to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of fees.