It’s an underpublicised truth that a Ferryside residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Ferryside property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining slips below 80 years, you will end up paying half of the property's 'marriage value' in addition to 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 Ferryside will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases 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 conveyancer from beginning to end of the process.
Leasehold residencies in Ferryside with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| 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. |
Irrespective of whether you are a tenant or a landlord in Ferryside,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Ferryside valuers.
Subsequent to lengthy discussions with the landlord of her basement flat in Ferryside, Catherine initiated the lease extension process as the eighty year threshold was fast nearing. The transaction was concluded in May 2011. The freeholder’s charges were restricted to slightly above 550 GBP.
Last month we were phoned by Mr and Mrs. H Evans , who took over the lease of a garden apartment in Ferryside in April 2006. We are asked if we could estimate the price would be for a ninety year lease extension. Identical flats in Ferryside with a long lease were valued around £225,800. The average ground rent payable was £60 billed quarterly. The lease ended on 7 April 2086. Given that there were 60 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £24,700 and £28,600 exclusive of expenses.
In 2010 we were called by Mrs G Dupont who, having acquired a first floor flat in Ferryside in September 1999. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Similar residencies in Ferryside with a long lease were in the region of £210,000. The average ground rent payable was £50 collected yearly. The lease terminated in 2106. Taking into account 80 years unexpired we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of legals.