Unfortunately that a Essington residential lease is a wasting 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 Essington property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Essington will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold properties in Essington with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Retaining our service gives you better control over the value of your Essington leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Daniel owned a studio apartment in Essington on the market with a lease of just over 72 years unexpired. Daniel informally approached his freeholder a well known local-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Daniel to exercise his statutory right. Daniel obtained expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Mr I Gómez bought a purpose-built apartment in Essington in September 1995. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Similar residencies in Essington with a long lease were in the region of £210,600. The average ground rent payable was £45 billed per annum. The lease finished in 2087. Given that there were 62 years remaining we calculated the compensation to the landlord for the lease extension to be between £18,100 and £20,800 plus legals.
Last August we were phoned by Dr Logan André , who acquired a ground floor flat in Essington in September 2007. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Comparative properties in Essington with a long lease were valued about £260,000. The average amount of ground rent was £50 collected per annum. The lease lapsed on 25 August 2098. Given that there were 73 years remaining we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus legals.