With a residential leasehold property in Ferryside, you effectively rent it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately greater particularly once there are fewer than eighty years remaining. Residents in Ferryside with a lease approaching 81 years unexpired should seriously consider extending it without delay. When a lease has below 80 years outstanding, under the relevant Act the freeholder can calculate and levy a greater premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Yorkshire 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. |
Using our service gives you better control over the value of your Ferryside leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Freddie owned a 2 bedroom flat in Ferryside being sold with a lease of fraction over fifty eight years unexpired. Freddie on an informal basis approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be payable on a lease extension were Freddie to invoke his statutory right. Freddie procured expert legal guidance and secured an acceptable deal informally and sell the property.
Ms Ellen Harris completed a one bedroom apartment in Ferryside in July 2007. The dilemma was if we could shed any light on how much (roughly) premium could be to prolong the lease by a further 90 years. Identical properties in Ferryside with an extended lease were worth £300,000. The average amount of ground rent was £50 invoiced monthly. The lease elapsed in 2102. Taking into account 76 years outstanding we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 not including professional charges.
In 2013 we were contacted by Mr and Mrs. J Stewart who, having acquired a basement flat in Ferryside in August 2002. We are asked if we could approximate the premium would be to extend the lease by an additional years. Comparable premises in Ferryside with an extended lease were in the region of £257,800. The average amount of ground rent was £65 collected per annum. The lease concluded in 2091. Given that there were 65 years left we approximated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of legals.