It’s an underpublicised certainty that a Greystones 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 depreciation being disguised by increases in the Greystones property market.Where your lease has approximately 90 years left, you need to start thinking about 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 slips below eighty years - otherwise a higher amount will be due. The majority of flat owners in Greystones will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date 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. |
Using our service gives you enhanced control over the value of your Greystones leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last October John, started to get near to the eighty-year mark with the lease on his basement flat in Greystones. Having bought his home 19 years ago, the length of the lease was of no importance. by good luck, it dawned on him that he needed to take steps soon on a lease extension. John was able to extend his lease just under the wire last March. John and the landlord who owned the flat above in the end agreed on sum of £5,500 . If the lease had descended to less than eighty years, the figure would have increased by a minimum £950.
In 2011 we were e-mailed by Mrs Molly Edwards who, having completed a purpose-built apartment in Greystones in June 2003. The dilemma was if we could estimate the price would be for a ninety year lease extension. Identical flats in Greystones with an extended lease were worth £270,000. The mid-range amount of ground rent was £65 billed per annum. The lease finished in 2093. Taking into account 68 years left we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus fees.
Last Spring we were approach by Mr and Mrs. M Hill , who completed a basement apartment in Greystones in July 2001. The question was if we could approximate the premium would be to prolong the lease by ninety years. Identical premises in Greystones with 100 year plus lease were in the region of £208,600. The average ground rent payable was £60 billed annually. The lease came to a finish in 2082. Given that there were 57 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 plus costs.