Unfortunately that a East Leake 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 depreciation being disguised by increases in the East Leake property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining dips under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in East Leake will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
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 further 90 years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 handle East Leake 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.
During the course of the last few months Ryan, came very near to the 80-year mark with the lease on his leasehold flat in East Leake. Having purchased his home twenty years ago, the lease term was of minimal interest. Fortunately, he noticed he needed to take steps soon on a lease extension. Ryan arranged for a lease extension just in the nick of time last April. Ryan and the landlord ultimately agreed on an amount of £6,000 . If the lease had gone lower than eighty years, the sum would have escalated by at least £950.
Last Spring we were contacted by Mr and Mrs. E Williams , who bought a one bedroom flat in East Leake in May 2008. The question was if we could approximate the premium could be for a ninety year lease extension. Comparative properties in East Leake with 100 year plus lease were valued about £290,000. The average amount of ground rent was £45 collected yearly. The lease came to a finish on 8 May 2099. Given that there were 73 years left we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.
In 2013 we were phoned by Dr Liam Lefebvre who, having owned a first floor flat in East Leake in May 2010. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Identical premises in East Leake with a long lease were valued around £235,600. The average ground rent payable was £60 invoiced per annum. The lease came to a finish in 2088. Having 62 years left we approximated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 plus professional charges.