Unfortunately that a Ferryhill residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Ferryhill property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining falls below 80 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 extra value that a lease extension will add the property Most flat owners in Ferryhill will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Ferryhill with over one hundred years outstanding 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 purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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; |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date 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 conveyancers that we work with handle Ferryhill 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.
Owen was the the leasehold proprietor of a 2 bedroom flat in Ferryhill being sold with a lease of a few days over fifty eight years outstanding. Owen on an informal basis spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Owen to invoke his statutory right. Owen obtained expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Last month we were called by Mr and Mrs. B Lefèvre , who moved into a first floor apartment in Ferryhill in January 2008. The dilemma was if we could approximate the price would be to prolong the lease by 90 years. Comparable homes in Ferryhill with a long lease were in the region of £208,600. The average amount of ground rent was £60 billed per annum. The lease lapsed on 9 August 2082. Taking into account 57 years unexpired we calculated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 not including legals.
Last Winter we were contacted by Ms J Jackson , who owned a recently refurbished flat in Ferryhill in November 2002. The dilemma was if we could approximate the premium would likely be for a ninety year lease extension. Comparative premises in Ferryhill with 100 year plus lease were worth £200,000. The mid-range amount of ground rent was £50 collected monthly. The lease came to a finish on 12 June 2102. Taking into account 77 years left we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including legals.