Grasmere leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Grasmere residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Grasmere you must investigate if your lease has between 70 and 90 years remaining. There are good reasons why a Grasmere leaseholder with a lease having around 80 years left should take action to make sure that a lease extension is put in place without delay
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with undertake Grasmere 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 lawyer we work with provide it.
Tommy owned a high value apartment in Grasmere on the market with a lease of just over sixty years left. Tommy on an informal basis spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Tommy to invoke his statutory right. Tommy obtained expert advice and secured satisfactory resolution informally and sell the flat.
Mr and Mrs. F Brooks bought a newly refurbished apartment in Grasmere in June 2008. We are asked if we could estimate the price could be to prolong the lease by 90 years. Comparative properties in Grasmere with a long lease were in the region of £184,000. The mid-range ground rent payable was £55 billed annually. The lease concluded in 2079. Considering the 53 years remaining we approximated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including legals.
Mr and Mrs. U Clark acquired a recently refurbished apartment in Grasmere in February 1998. The question was if we could approximate the premium would likely be to prolong the lease by a further 90 years. Comparable residencies in Grasmere with a long lease were worth £290,000. The mid-range amount of ground rent was £45 collected quarterly. The lease ran out in 2099. Considering the 73 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus costs.