The closer a residential lease in Frogmore gets to zero years unexpired, the more it reduces the value of the property. Where the lease has, beyond one hundred years remaining then this decrease may be negligible however there will become a stage when a lease has fewer than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner as opposed to later. The majority of flat owners in Frogmore will qualify for this right; nevertheless a lawyer will be able to advise if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is conventional wisdom that a residential leasehold with in excess of 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 property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| 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 Frogmore 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.
In the wake of 9 months of protracted negotiations with the freeholder of her garden apartment in Frogmore, Naomi initiated the lease extension process just as her lease was nearing the all-important eighty-year threshold. The transaction completed in February 2013. The landlord’s fees were kept to an absolute minimum.
Last Autumn we were e-mailed by Ms Molly Evans , who owned a ground floor flat in Frogmore in November 2012. We are asked if we could estimate the premium would be to extend the lease by 90 years. Comparative residencies in Frogmore with 100 year plus lease were in the region of £166,400. The mid-range ground rent payable was £60 billed annually. The lease lapsed on 10 October 2080. Given that there were 54 years left we approximated the premium to the landlord for the lease extension to be within £32,300 and £37,400 plus professional charges.
Last Summer we were called by Mr Aarav Cook , who acquired a purpose-built apartment in Frogmore in March 2011. We are asked if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Similar residencies in Frogmore with an extended lease were valued about £232,800. The mid-range amount of ground rent was £45 billed every twelve months. The lease expired on 20 November 2091. Taking into account 65 years remaining we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus professional charges.