It’s a harsh truth that a Earley residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Earley property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining falls below eighty years, you will then be required to pay half of the property's 'marriage value' on top of 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 leasehold owners in Earley will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold residencies in Earley with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Earley 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.
Two years ago Harry, came dangerously close to the eighty-year mark with the lease on his studio flat in Earley. Having purchased his flat 18 years ago, the length of the lease was of no significance. Luckily, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Harry was able to extend his lease just under the wire in September. Harry and the landlord who owned the flat above eventually agreed on the final figure of £5,500 . If he had missed the deadline, the amount would have escalated by at least £1,025.
In 2012 we were approached by Ms Holly Rogers who, having moved into a first floor flat in Earley in May 1997. We are asked if we could approximate the premium would be to prolong the lease by ninety years. Similar flats in Earley with a long lease were valued around £205,000. The mid-range amount of ground rent was £50 collected annually. The lease terminated in 2103. Having 78 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including professional charges.
Last Spring we were approach by Ms Phoebe Walker , who bought a purpose-built flat in Earley in October 1996. The question was if we could approximate the price would be to prolong the lease by 90 years. Comparable premises in Earley with 100 year plus lease were in the region of £267,600. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease ended on 28 August 2092. Considering the 67 years outstanding we approximated the compensation to the landlord for the lease extension to be within £14,300 and £16,400 plus legals.