Unfortunately that a Goring residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Goring 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 below 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. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Goring will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is generally accepted that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Goring,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Goring valuers.
Mason owned a high value apartment in Goring on the market with a lease of fraction over 59 years remaining. Mason on an informal basis contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were Mason to invoke his statutory right. Mason procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
In 2012 we were e-mailed by Mr and Mrs. E López who, having purchased a one bedroom apartment in Goring in September 2000. The dilemma was if we could approximate the price would be for a 90 year extension to my lease. Similar flats in Goring with 100 year plus lease were worth £181,600. The mid-range ground rent payable was £55 collected per annum. The lease terminated on 11 October 2077. Considering the 52 years unexpired we calculated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus costs.
Dr L Stewart bought a one bedroom apartment in Goring in April 1998. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Comparable flats in Goring with a long lease were valued about £285,000. The average amount of ground rent was £45 collected every twelve months. The lease elapsed in 2097. Taking into account 72 years as a residual term we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.