As the length of the unexpired term of a Gorton residential lease decreases so does its value and therefore the value of your property. Where the residual term has, more than 100 years remaining then this decrease may be negligible however there will become a stage when a lease has less than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner rather than later. Many flat owners in Gorton will qualify for this right; that being said a lawyer will be able to confirm whether you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Regardless of whether you are a tenant or a landlord in Gorton,the lease extension lawyers 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 Gorton valuers.
Last October Ryan, started to get close to the 80-year mark with the lease on his two bedroom apartment in Gorton. In buying his property 18 years previously, the unexpired term was of minimal relevance. by good luck, he became aware that he needed to take steps soon on Extending the lease. Ryan arranged for a lease extension at the eleventh hour last January. Ryan and the landlord who owned the flat above in the end settled on the final figure of £5,500 . If the lease had dropped below eighty years, the amount would have gone up by a minimum £850.
Last Summer we were approach by Mr and Mrs. M Gómez , who was assigned a lease of a ground floor apartment in Gorton in May 2002. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative premises in Gorton with an extended lease were worth £174,200. The average amount of ground rent was £55 collected annually. The lease finished in 2076. Given that there were 51 years outstanding we calculated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 plus professional charges.
In 2009 we were contacted by Dr Francesca James who, having moved into a one bedroom flat in Gorton in October 1997. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar properties in Gorton with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease expired in 2096. Given that there were 71 years outstanding we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including legals.