Freshford leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Freshford tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Freshford you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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 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 conveyancer we work with provide it.
Two years ago Jackson, came very close to the 80-year threshold with the lease on his first floor apartment in Freshford. In buying his property two decades ago, the unexpired term was of no interest. by good luck, he noticed he needed to take steps soon on a lease extension. Jackson arranged for a lease extension just under the wire in January. Jackson and the landlord eventually settled on sum of £5,500 . If the lease had slid lower than 80 years, the sum would have become more costly by a minimum £1,000.
Dr S Leroy moved into a recently refurbished flat in Freshford in March 2005. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Comparable properties in Freshford with an extended lease were worth £218,400. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease finished in 2085. Taking into account 59 years remaining we estimated the compensation to the landlord for the lease extension to be between £27,600 and £31,800 exclusive of legals.
Last Winter we were called by Mr Sam Ricardo , who was assigned a lease of a basement apartment in Freshford in October 2007. The dilemma was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Similar premises in Freshford with a long lease were valued around £205,000. The average amount of ground rent was £50 invoiced every twelve months. The lease finished on 1 April 2105. Taking into account 79 years outstanding we calculated the premium to the freeholder for the lease extension to be between £7,600 and £8,800 not including costs.