Unfortunately that a East Bergholt residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the East Bergholt property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term dips below 80 years, you will end up paying 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 flat owners in East Bergholt will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a property with in excess of 100 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 decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with undertake East Bergholt 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 lawyer we work with provide it.
Aaron was the the leasehold owner of a studio flat in East Bergholt being marketed with a lease of fraction over 59 years outstanding. Aaron on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Aaron to exercise his statutory right. Aaron procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Summer we were approach by Mrs V Edwards , who bought a garden apartment in East Bergholt in March 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year extension to my lease. Comparable properties in East Bergholt with 100 year plus lease were valued about £203,200. The average amount of ground rent was £65 billed every twelve months. The lease ran out in 2087. Taking into account 61 years outstanding we approximated the premium to the landlord for the lease extension to be within £19,000 and £22,000 plus legals.
Mr and Mrs. I Collins purchased a first floor apartment in East Bergholt in September 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Identical properties in East Bergholt with 100 year plus lease were valued about £260,000. The mid-range ground rent payable was £50 billed every twelve months. The lease concluded on 8 May 2098. Having 72 years unexpired we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.