It’s an underpublicised truth that a Gunnislake residential lease is a wasting 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 depreciation being disguised by increases in the Gunnislake property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Gunnislake will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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. |
Using our service gives you better control over the value of your Gunnislake 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.
Joshua was the the leasehold proprietor of a 2 bedroom flat in Gunnislake on the market with a lease of just over sixty years remaining. Joshua informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 yearly. No ground rent would be due on a lease extension were Joshua to invoke his statutory right. Joshua procured expert legal guidance and was able to make a more informed decision and deal with the matter and readily saleable.
Last Christmas we were called by Mrs Ellie Fournier , who owned a one bedroom apartment in Gunnislake in May 1999. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in Gunnislake with an extended lease were valued about £176,200. The mid-range amount of ground rent was £65 collected annually. The lease lapsed in 2079. Given that there were 56 years left we calculated the premium to the landlord for the lease extension to be within £29,500 and £34,000 not including expenses.
Mr A Nguyen moved into a ground floor flat in Gunnislake in January 2012. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Identical properties in Gunnislake with 100 year plus lease were valued around £242,600. The average ground rent payable was £45 collected annually. The lease finished in 2090. Considering the 67 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 plus costs.