It’s an underpublicised certainty that a Ironbridge 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 deflation being disguised by increases in the Ironbridge property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips below 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. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Ironbridge will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Ironbridge 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 conveyancer we work with provide it.
Archie was the the leasehold owner of a conversion apartment in Ironbridge being sold with a lease of a few days over sixty years left. Archie on an informal basis approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Archie to exercise his statutory right. Archie procured expert legal guidance and was able to make an informed decision and handle with the matter and sell the flat.
Mr Aarav Moreau owned a first floor flat in Ironbridge in July 2010. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Comparative flats in Ironbridge with an extended lease were in the region of £218,000. The average ground rent payable was £45 collected every twelve months. The lease concluded in 2088. Given that there were 63 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £17,100 and £19,800 exclusive of legals.
Mr and Mrs. R David purchased a one bedroom flat in Ironbridge in September 2004. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Comparative residencies in Ironbridge with a long lease were in the region of £265,000. The mid-range ground rent payable was £55 collected annually. The lease finished in 2099. Taking into account 74 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.