Unfortunately that a Keyworth residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Keyworth property market.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Keyworth will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire Building Society | 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. |
The lawyers that we work with procure Keyworth 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.
In 2014 Harry, started to get near to the 80-year threshold with the lease on his ground floor flat in Keyworth. Having bought his flat two decades ago, the unexpired term was of little significance. by good luck, it dawned on him that he needed to take action soon on Extending the lease. Harry was able to extend his lease just ahead of time last March. Harry and the landlord ultimately settled on sum of £5,000 . If he not met the deadline, the premium would have gone up by at least £1,150.
Mr and Mrs. T Reed bought a studio flat in Keyworth in March 1995. The dilemma was if we could approximate the premium could be for a ninety year extension to my lease. Identical properties in Keyworth with a long lease were valued around £267,600. The mid-range ground rent payable was £65 billed per annum. The lease ended on 8 April 2092. Given that there were 67 years remaining we approximated the compensation to the landlord for the lease extension to be between £14,300 and £16,400 plus professional charges.
Last Autumn we were called by Mr David López , who bought a recently refurbished apartment in Keyworth in March 1997. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Identical properties in Keyworth with an extended lease were worth £206,200. The mid-range ground rent payable was £55 collected monthly. The lease lapsed in 2081. Having 56 years outstanding we calculated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of professional charges.