Drybrook leases on residential properties are gradually losing value. Where your lease has approximately ninety years left, you should start considering the need for a lease extension. If lease term is under 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Drybrook will mostly qualify for a lease extension; however a solicitor will check your eligibility. In certain cases you may not be entitled. There are also strict deadlines and formalities to follow once the process is triggered so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold premises in Drybrook with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
The lawyers that we work with procure Drybrook 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.
Sebastian was the the leasehold owner of a studio flat in Drybrook being marketed with a lease of a few days over 61 years unexpired. Sebastian informally contacted his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be payable on a lease extension were Sebastian to exercise his statutory right. Sebastian obtained expert legal guidance and was able to make an informed judgement and deal with the matter and sell the flat.
Mr and Mrs. E Roberts owned a purpose-built apartment in Drybrook in August 2000. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Similar flats in Drybrook with 100 year plus lease were valued around £230,800. The mid-range ground rent payable was £60 collected yearly. The lease ran out on 20 April 2085. Considering the 60 years outstanding we approximated the compensation to the landlord for the lease extension to be within £24,700 and £28,600 plus costs.
In 2014 we were phoned by Mr J King who, having took over the lease of a garden apartment in Drybrook in May 2000. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Identical residencies in Drybrook with an extended lease were in the region of £210,000. The mid-range amount of ground rent was £50 collected annually. The lease lapsed in 2105. Given that there were 80 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus expenses.