It’s a harsh truth that a Edge Hill residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Edge Hill property market.Where your lease has approximately 90 years left, you need to start thinking about 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' in addition to 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 flat owners in Edge Hill will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you increased control over the value of your Edge Hill leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of protracted negotiations with the freeholder of her leasehold flat in Edge Hill, Amy initiated the lease extension process just as her lease was approaching the all-important 80-year deadline. The lease extension completed in February 2005. The freeholder’s costs were kept to an absolute minimum.
Last Spring we were e-mailed by Mr and Mrs. S Taylor , who moved into a one bedroom flat in Edge Hill in October 2009. The dilemma was if we could estimate the price would likely be to extend the lease by an additional years. Comparative premises in Edge Hill with a long lease were in the region of £265,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease expired on 15 November 2098. Given that there were 73 years unexpired we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.
In 2012 we were called by Dr N Campbell who, having completed a one bedroom apartment in Edge Hill in October 2004. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Similar residencies in Edge Hill with a long lease were valued about £264,000. The average amount of ground rent was £60 invoiced monthly. The lease expired in 2078. Taking into account 53 years unexpired we approximated the premium to the freeholder for the lease extension to be between £37,100 and £42,800 not including expenses.