It’s a harsh truth that a Idle residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Idle property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term dips 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 additional value that a lease extension will add the property Most leasehold owners in Idle will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold residencies in Idle with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
Lease extensions in Idle can be a difficult process. We recommend you procure guidance from a lawyer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Idle lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After lengthy negotiations with the freeholder of her studio flat in Idle, Freya started the lease extension process as the 80 year mark was rapidly nearing. The transaction completed in August 2011. The freeholder’s charges were negotiated to below 600 pounds.
Mr Kyle Smith purchased a purpose-built flat in Idle in July 1999. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Comparative flats in Idle with 100 year plus lease were valued about £285,000. The average amount of ground rent was £55 billed annually. The lease concluded in 2105. Considering the 79 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus professional charges.
Last Summer we were phoned by Mr V Smith , who owned a recently refurbished flat in Idle in April 2009. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Comparable premises in Idle with an extended lease were valued about £193,400. The average ground rent payable was £65 collected yearly. The lease came to a finish in 2085. Considering the 59 years left we estimated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of professional charges.