It’s an underpublicised truth that a Ferryside residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Ferryside property prices.Once your lease gets to 85ish years, you need to 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 slips lower than 80 years - otherwise a higher premium will be payable. Most leasehold owners in Ferryside will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
The conveyancers that we work with handle Ferryside 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.
In the wake of 6 months of protracted correspondence with the freeholder of her studio apartment in Ferryside, Mia started the lease extension process just as the lease was coming close to the critical 80-year threshold. The legal work was finalised in June 2005. The freeholder’s charges were negotiated to below 700 pounds.
Mr and Mrs. G Green moved into a one bedroom flat in Ferryside in October 1996. The dilemma was if we could approximate the price would be to extend the lease by 90 years. Comparative residencies in Ferryside with a long lease were worth £205,000. The average amount of ground rent was £50 invoiced quarterly. The lease termination date was on 26 July 2104. Taking into account 79 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of legals.
In 2012 we were contacted by Dr Benjamin Davies who, having took over the lease of a first floor apartment in Ferryside in April 2001. We are asked if we could estimate the price would be to extend the lease by ninety years. Comparable homes in Ferryside with 100 year plus lease were valued about £275,000. The mid-range amount of ground rent was £65 collected yearly. The lease lapsed in 2093. Taking into account 68 years remaining we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including fees.