Geddington leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Most owners of residential leasehold property in Geddington enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Geddington you must investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Geddington with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | 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 |
The conveyancers that we work with procure Geddington 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.
During the course of the last few months Gabriel, came critically close to the 80-year mark with the lease on his purpose- built flat in Geddington. In buying his home 18 years previously, the length of the lease was of minimal concern. Luckily, he recognised he would imminently be paying an escalated premium for a lease extension. Gabriel extended the lease at the eleventh hour last April. Gabriel and the landlord who owned the flat above subsequently settled on a premium of £6,000 . If he not met the deadline, the amount would have gone up by at least £925.
In 2013 we were called by Mr and Mrs. R Roux who, having took over the lease of a purpose-built flat in Geddington in April 2000. The question was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Geddington with 100 year plus lease were worth £245,000. The mid-range amount of ground rent was £50 billed monthly. The lease ran out on 7 October 2093. Considering the 68 years remaining we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus expenses.
In 2013 we were contacted by Dr Elijah Thompson who, having purchased a garden flat in Geddington in October 2004. The question was if we could shed any light on how much (approximately) price could be to prolong the lease by ninety years. Similar flats in Geddington with an extended lease were valued around £285,000. The average ground rent payable was £55 invoiced every twelve months. The lease ended in 2104. Having 79 years outstanding we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including expenses.