Unfortunately that a Freshford residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Freshford property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term 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 Freshford will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| 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 |
| 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 procure Freshford 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 conveyancing solicitor we work with provide it.
Jake owned a 2 bedroom apartment in Freshford on the market with a lease of fraction over 61 years unexpired. Jake on an informal basis approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Jake to exercise his statutory right. Jake obtained expert advice and was able to make an informed decision and handle with the matter and sell the flat.
Last Summer we were phoned by Mr Max Roux , who owned a one bedroom flat in Freshford in June 2004. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Comparative properties in Freshford with a long lease were worth £191,400. The average ground rent payable was £55 invoiced annually. The lease came to a finish on 7 March 2080. Having 54 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £34,200 and £39,600 exclusive of legals.
In 2013 we were approached by Ms Jordan Lefèvre who, having moved into a basement apartment in Freshford in January 1995. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by ninety years. Comparable premises in Freshford with 100 year plus lease were worth £295,000. The average ground rent payable was £45 collected yearly. The lease came to a finish on 15 June 2100. Having 74 years remaining we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus legals.