It’s an underpublicised truth that a Gainsborough residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Gainsborough property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining drops under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Gainsborough will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 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 |
|---|---|
| Chelsea 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Gainsborough can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Gainsborough lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Jake was the the leasehold owner of a 2 bedroom flat in Gainsborough on the market with a lease of just over fifty eight years outstanding. Jake on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Jake to invoke his statutory right. Jake procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
In 2012 we were e-mailed by Dr V Lefebvre who, having purchased a basement flat in Gainsborough in April 1996. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative properties in Gainsborough with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £45 invoiced every twelve months. The lease ran out in 2097. Taking into account 71 years left we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including legals.
Mr and Mrs. S Harris took over the lease of a one bedroom apartment in Gainsborough in March 1998. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable residencies in Gainsborough with a long lease were in the region of £225,800. The average amount of ground rent was £60 invoiced yearly. The lease finished on 26 April 2086. Considering the 60 years left we estimated the premium to the freeholder for the lease extension to be between £23,800 and £27,400 plus costs.