It’s a harsh truth that a Headingley 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 first few years due to the depreciation being disguised by increases in the Headingley property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term drops under eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Headingley will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some cases you may not qualify. 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.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Headingley lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Eli owned a 2 bedroom apartment in Headingley being marketed with a lease of a little over fifty eight years remaining. Eli on an informal basis approached his landlord being a well known London-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Eli to invoke his statutory right. Eli obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last Autumn we were approach by Dr Leon Smith , who moved into a purpose-built apartment in Headingley in November 2004. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable flats in Headingley with an extended lease were valued around £235,600. The average ground rent payable was £60 invoiced quarterly. The lease concluded on 26 March 2088. Considering the 62 years left we estimated the premium to the landlord to extend the lease to be between £21,900 and £25,200 plus legals.
In 2012 we were e-mailed by Mr and Mrs. W Williams who, having owned a studio flat in Headingley in August 1999. The dilemma was if we could estimate the premium would likely be for a 90 year lease extension. Identical residencies in Headingley with an extended lease were worth £174,200. The average ground rent payable was £55 invoiced annually. The lease expired on 12 January 2077. Taking into account 51 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of legals.