Laceby leases on residential properties are gradually losing value. Where your lease has about ninety years unexpired, you should start considering the need for a lease extension. If lease term dips under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Laceby will usually be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In some cases you may not be entitled. There are prescribed deadlines and formalities to comply with once the process has commenced so it’s best to be guided by a lawyer during the process.
Leasehold residencies in Laceby with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
The lawyers that we work with procure Laceby 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 lawyer we work with provide it.
Hugo owned a studio apartment in Laceby being marketed with a lease of just over 61 years outstanding. Hugo on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Hugo to invoke his statutory right. Hugo obtained expert advice and was able to make an informed judgement and handle with the matter and sell the property.
In 2012 we were approached by Dr Kayleigh Cox who, having owned a recently refurbished flat in Laceby in April 1999. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparable flats in Laceby with an extended lease were worth £255,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease concluded on 7 February 2095. Considering the 70 years as a residual term we estimated the premium to the landlord for the lease extension to be between £10,500 and £12,000 exclusive of professional charges.
Dr Louise Jones purchased a studio flat in Laceby in August 2008. The dilemma was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Comparable flats in Laceby with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 invoiced quarterly. The lease expiry date was in 2075. Given that there were 50 years left we calculated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 plus professional charges.