Grays leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Grays tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Grays you must investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Regardless of whether you are a tenant or a freeholder in Grays,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Grays valuers.
In the wake of 9 months of unsuccessful correspondence with the freeholder of her two bedroom flat in Grays, Abigail commenced the lease extension process just as her lease was coming close to the crucial eighty-year threshold. The lease extension was concluded in April 2006. The landlord’s costs were kept to an absolute minimum.
In 2011 we were e-mailed by Mr and Mrs. E François who, having took over the lease of a garden flat in Grays in November 2006. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Grays with a long lease were worth £275,000. The mid-range amount of ground rent was £55 billed yearly. The lease ended on 9 June 2101. Taking into account 76 years outstanding we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including costs.
An example of a Lease Extension matter before the tribunal for a Grays property is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case related to 13 flats. The unexpired term as at the valuation date was 76 years.