East Cowes leases on residential properties are gradually losing value. if your lease has in the region of 90 years remaining, you should start considering the need for a lease extension. If lease term dips under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to 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. Flat owners in East Cowes will mostly qualify for a lease extension; however a solicitor will confirm your eligibility. In certain cases you may not be entitled. There are also strict timetables and steps to comply with once the process is triggered so it’s prudent to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle East Cowes 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.
After protracted negotiations with the freeholder of her basement apartment in East Cowes, Rebecca started the lease extension process just as her lease was approaching the crucial 80-year mark. The transaction completed in May 2006. The landlord’s costs were kept to an absolute minimum.
In 2010 we were e-mailed by Mr and Mrs. P James who, having bought a basement apartment in East Cowes in January 1997. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical flats in East Cowes with a long lease were in the region of £168,800. The average ground rent payable was £60 billed every twelve months. The lease ran out on 27 April 2081. Taking into account 55 years unexpired we approximated the premium to the landlord to extend the lease to be within £31,400 and £36,200 exclusive of legals.
Last Autumn we were called by Mr and Mrs. V Martínez , who completed a first floor apartment in East Cowes in February 1995. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Identical properties in East Cowes with 100 year plus lease were valued about £235,200. The average amount of ground rent was £45 invoiced every twelve months. The lease concluded on 11 April 2092. Taking into account 66 years unexpired we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of fees.