It’s a harsh truth that a Grange Park 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 reduction being disguised by increases in the Grange Park property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. Most flat owners in Grange Park will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Retaining our service gives you increased control over the value of your Grange Park leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jonathan owned a studio flat in Grange Park being marketed with a lease of fraction over 72 years left. Jonathan on an informal basis spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to 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 Jonathan to invoke his statutory right. Jonathan procured expert legal guidance and secured satisfactory resolution without going to tribunal and readily saleable.
In 2009 we were phoned by Mrs P Wright who, having purchased a purpose-built apartment in Grange Park in July 1998. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar flats in Grange Park with a long lease were valued around £256,600. The average amount of ground rent was £60 billed annually. The lease termination date was in 2078. Taking into account 52 years unexpired we calculated the premium to the landlord to extend the lease to be within £39,000 and £45,000 plus professional charges.
An example of a Lease Extension case for a Grange Park residence is First Floor Flat 109 Lyndhurst Road in May 2010. Following a vesting order by Edmonton County Court on 29th October 2009 the Tribunal decided on a figure of £5,012 for a lease extension. This case related to 1 flat. The number of years remaining on the existing lease(s) was 81.79 years.