It’s a harsh truth that a Grimsby residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Grimsby property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining dips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Grimsby will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold properties in Grimsby with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you enhanced control over the value of your Grimsby leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Finn, came perilously near to the eighty-year threshold with the lease on his first floor flat in Grimsby. In buying his property twenty years previously, the unexpired term was of little importance. Fortunately, he recognised he would soon be paying an inflated amount for Extending the lease. Finn extended the lease at the eleventh hour in May. Finn and the landlord subsequently agreed on the final figure of £6,000 . If the lease had slid to less than eighty years, the price would have gone up by a minimum £1,025.
In 2009 we were approached by Mr and Mrs. J Clark who, having acquired a basement flat in Grimsby in May 2003. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Comparative homes in Grimsby with a long lease were in the region of £246,800. The average amount of ground rent was £60 collected yearly. The lease ended on 11 June 2075. Considering the 50 years remaining we calculated the compensation to the landlord to extend the lease to be between £44,700 and £51,600 not including professional charges.
Last year we were called by Mr and Mrs. F Wilson , who was assigned a lease of a one bedroom apartment in Grimsby in August 1997. The dilemma was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Similar residencies in Grimsby with an extended lease were in the region of £208,200. The mid-range amount of ground rent was £65 collected monthly. The lease expiry date was in 2086. Taking into account 61 years left we calculated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 plus legals.