Grimsby leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Grimsby tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Grimsby you must see if your lease has between seventy and 90 years left. There are good reasons why a Grimsby leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is actioned without delay
It is generally considered that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the premises 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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 |
Using our service will provide you increased control over the value of your Grimsby leasehold, as your property will be more valuable and saleable in respect 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.
Ethan was the the leasehold owner of a studio apartment in Grimsby being marketed with a lease of a little over 72 years left. Ethan on an informal basis contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 per annum. Ordinarily, ground rent would not be payable on a lease extension were Ethan to invoke his statutory right. Ethan procured expert legal guidance and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
Ms P Johnson purchased a newly refurbished flat in Grimsby in August 2010. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Identical homes in Grimsby with a long lease were valued about £290,000. The mid-range amount of ground rent was £60 collected monthly. The lease expired in 2106. Considering the 80 years outstanding we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of fees.
Last Autumn we were phoned by Mrs N Morel , who bought a basement apartment in Grimsby in October 2009. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical properties in Grimsby with a long lease were in the region of £200,800. The average ground rent payable was £65 billed monthly. The lease finished in 2086. Given that there were 60 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 not including professional charges.