It’s a harsh certainty that a Godshill residential lease is a deteriorating 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 depreciation being disguised by increases in the Godshill property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining slips under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Godshill will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm 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 has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Godshill with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Godshill can be a difficult process. We recommend you obtain professional help from a conveyancer and valuer with experience in lease extensions.
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 in-depth market knowledge dealing with Godshill lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Oscar owned a 2 bedroom flat in Godshill being sold with a lease of a few days over fifty eight years unexpired. Oscar informally approached his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Oscar to invoke his statutory right. Oscar obtained expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
In 2009 we were approached by Mr and Mrs. I Petit who, having acquired a purpose-built flat in Godshill in October 2000. The question was if we could approximate the premium would be for a ninety year lease extension. Similar properties in Godshill with an extended lease were worth £235,200. The mid-range ground rent payable was £45 billed monthly. The lease finished on 20 November 2092. Given that there were 66 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including expenses.
Dr M Sánchez owned a one bedroom apartment in Godshill in April 1998. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year extension to my lease. Comparative homes in Godshill with 100 year plus lease were valued about £280,000. The mid-range amount of ground rent was £55 billed quarterly. The lease finished on 18 March 2103. Considering the 77 years left we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus legals.