It’s a harsh certainty that a Kirkby In Furness residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Kirkby In Furness property market.Once your lease nears 85ish years, you should start considering a lease extension. If lease term dips under eighty years, you will then be required to pay 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 extra value that a lease extension will add the property The majority of leasehold owners in Kirkby In Furness will be able to extend under the legislation; however a conveyancer will be able to confirm 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 lawyer for the duration of the formalities.
Leasehold residencies in Kirkby In Furness with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Kirkby In Furness,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Kirkby In Furness valuers.
Rory was the the leasehold proprietor of a studio flat in Kirkby In Furness on the market with a lease of fraction over 61 years outstanding. Rory on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Rory to exercise his statutory right. Rory procured expert advice and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2014 we were e-mailed by Dr Molly Moore who, having bought a first floor apartment in Kirkby In Furness in October 2007. The question was if we could estimate the premium would likely be to extend the lease by a further 90 years. Identical properties in Kirkby In Furness with an extended lease were in the region of £227,800. The mid-range ground rent payable was £45 billed per annum. The lease ran out in 2091. Considering the 65 years left we estimated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of legals.
Last month we were e-mailed by Ms I David , who completed a basement apartment in Kirkby In Furness in July 2000. The question was if we could approximate the premium could be to prolong the lease by an additional years. Comparable properties in Kirkby In Furness with an extended lease were in the region of £275,000. The mid-range ground rent payable was £55 billed monthly. The lease elapsed on 10 November 2102. Given that there were 76 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.