Eaglescliffe 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. It is the case that most Eaglescliffe tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Eaglescliffe you should investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Eaglescliffe,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Eaglescliffe valuers.
During the course of the last few months Ben, started to get close to the 80-year mark with the lease on his first floor flat in Eaglescliffe. Having purchased his flat twenty years previously, the lease term was of little significance. Luckily, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Ben extended the lease just ahead of time last July. Ben and the freeholder via the managing agents in the end agreed on an amount of £6,000 . If he failed to meet the deadline, the amount would have increased by a minimum £875.
In 2010 we were approached by Mrs Imogen Laurent who, having completed a one bedroom flat in Eaglescliffe in March 2001. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Similar properties in Eaglescliffe with 100 year plus lease were in the region of £218,000. The average amount of ground rent was £45 billed every twelve months. The lease expired on 12 July 2088. Having 63 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £17,100 and £19,800 exclusive of legals.
In 2013 we were phoned by Mr and Mrs. R Rose who, having was assigned a lease of a studio flat in Eaglescliffe in April 2012. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Identical premises in Eaglescliffe with 100 year plus lease were worth £265,000. The average amount of ground rent was £50 billed quarterly. The lease came to a finish in 2099. Considering the 74 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.