It’s an underpublicised truth that a Earley residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Earley property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining drops below 80 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. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Earley will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Earley can be a difficult process. We recommend you procure professional help from a lawyer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Earley lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of 9 months of protracted correspondence with the freeholder of her leasehold flat in Earley, Lily started the lease extension process as the 80 year deadline was swiftly nearing. The legal work was concluded in January 2010. The freeholder’s costs were kept to an absolute minimum.
Last Christmas we were called by Mr Teddy Reed , who completed a newly refurbished flat in Earley in October 2007. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Similar homes in Earley with an extended lease were worth £210,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease ended on 25 August 2106. Having 80 years remaining we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including legals.
Ms Mollie Bonnet moved into a newly refurbished apartment in Earley in July 2009. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Comparative residencies in Earley with a long lease were in the region of £280,000. The average ground rent payable was £45 collected per annum. The lease ran out in 2095. Having 69 years remaining we calculated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including expenses.