It’s a harsh truth that a Kirkbymoorside residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Kirkbymoorside property prices.Where your lease has approximately 90 years left, you need to start thinking about 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 slips under 80 years - otherwise a higher premium will be payable. Most leasehold owners in Kirkbymoorside will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 conveyancing solicitors that we work with handle Kirkbymoorside 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 conveyancing solicitor we work with provide it.
Muhammad owned a studio apartment in Kirkbymoorside on the market with a lease of fraction over fifty eight years remaining. Muhammad informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Muhammad to invoke his statutory right. Muhammad procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Last year we were called by Mr and Mrs. W Ward , who completed a newly refurbished apartment in Kirkbymoorside in January 2006. The dilemma was if we could estimate the premium could be for a 90 year lease extension. Identical premises in Kirkbymoorside with 100 year plus lease were in the region of £216,000. The average ground rent payable was £60 invoiced yearly. The lease terminated on 13 October 2084. Given that there were 58 years unexpired we estimated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of costs.
Last Summer we were called by Mr and Mrs. O Campbell , who completed a purpose-built flat in Kirkbymoorside in April 2007. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparative homes in Kirkbymoorside with an extended lease were in the region of £205,000. The mid-range amount of ground rent was £50 collected annually. The lease terminated in 2104. Given that there were 78 years left we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.