Eye leases on residential deteriorating in value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you start paying an additional element called marriage value. Leasehold owners in Eye will mostly qualify for a lease extension; however It would be wise to check with a lawyer to check your eligibility. In some situations you may not be entitled. There are prescribed deadlines and steps to follow once the process is triggered so it’s best to be guided by a conveyancing solicitor during the process.
It is generally considered that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 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 |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Eye 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 conveyancer we work with provide it.
Harvey was the the leasehold proprietor of a studio apartment in Eye on the market with a lease of just over 61 years unexpired. Harvey informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 annually. No ground rent would be payable on a lease extension were Harvey to invoke his statutory right. Harvey procured expert legal guidance and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
Mr and Mrs. I Phillips completed a one bedroom flat in Eye in August 2010. The dilemma was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by 90 years. Similar flats in Eye with 100 year plus lease were worth £254,200. The mid-range ground rent payable was £60 collected quarterly. The lease came to a finish in 2077. Given that there were 51 years remaining we calculated the compensation to the freeholder to extend the lease to be between £43,700 and £50,600 plus expenses.
Last year we were phoned by Mr Harvey Flores , who moved into a basement apartment in Eye in January 2002. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparative premises in Eye with 100 year plus lease were valued around £210,600. The mid-range ground rent payable was £45 billed annually. The lease concluded in 2088. Having 62 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £18,100 and £20,800 not including legals.