Formby leases on domestic properties are gradually losing value. if your lease has approximately 90 years left, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease drops below this level then you begin incurring an additional element called marriage value. Flat owners in Formby will usually qualify for a lease extension; however it’s a good idea to check with a lawyer to check your eligibility. In certain situations you may not qualify. There are prescribed timetables and procedures to follow once the process has commenced so it’s best to be guided by a conveyancer during the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Formby 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.
Following unsuccessful discussions with the landlord of her one bedroom flat in Formby, Sophie started the lease extension process as the eighty year deadline was swiftly advancing. The transaction completed in April 2009. The freeholder’s charges were kept to an absolute minimum.
Last Autumn we were approach by Dr Jackson Leroy , who completed a purpose-built flat in Formby in April 2012. We are asked if we could estimate the price could be to extend the lease by 90 years. Comparative premises in Formby with 100 year plus lease were worth £255,000. The mid-range ground rent payable was £50 invoiced per annum. The lease ran out on 23 July 2096. Given that there were 71 years remaining we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.
In 2012 we were e-mailed by Dr K Hill who, having purchased a newly refurbished apartment in Formby in February 2011. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Comparable flats in Formby with an extended lease were worth £254,200. The average amount of ground rent was £60 invoiced monthly. The lease finished on 18 February 2076. Taking into account 51 years remaining we estimated the premium to the landlord for the lease extension to be between £43,700 and £50,600 not including legals.