Groby 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 your lease gets more expensive. It is the case that most Groby tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Groby you should check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Groby with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Retaining our service will provide you enhanced control over the value of your Groby leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Noah owned a high value apartment in Groby on the market with a lease of a little over sixty years left. Noah on an informal basis approached his landlord a well known London-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 rise in the rent to £200 annually. No ground rent would be payable on a lease extension were Noah to invoke his statutory right. Noah obtained expert advice and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Dr Melissa Fournier moved into a one bedroom flat in Groby in March 1997. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Identical homes in Groby with a long lease were valued around £191,000. The mid-range ground rent payable was £65 collected quarterly. The lease concluded in 2084. Having 58 years as a residual term we estimated the premium to the landlord to extend the lease to be between £23,800 and £27,400 plus costs.
In 2009 we were contacted by Mr Archie Alexander who, having was assigned a lease of a one bedroom apartment in Groby in April 1999. The question was if we could estimate the premium would likely be to extend the lease by ninety years. Comparative residencies in Groby with a long lease were worth £250,000. The average ground rent payable was £50 billed quarterly. The lease elapsed on 11 April 2095. Having 69 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including costs.