Ladywell leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Ladywell tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Ladywell you should investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be equivalent in value to 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Ladywell,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Ladywell valuers.
Off the back of protracted correspondence with the freeholder of her two bedroom flat in Ladywell, Lydia commenced the lease extension process as the 80 year mark was fast approaching. The legal work was concluded in July 2006. The landlord’s fees were negotiated to a tad over 650 GBP.
Mr Finn Garcia bought a newly refurbished flat in Ladywell in February 2012. We are asked if we could estimate the premium could be for a 90 year lease extension. Similar flats in Ladywell with an extended lease were in the region of £280,000. The average amount of ground rent was £55 invoiced quarterly. The lease termination date was in 2103. Having 78 years remaining we calculated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.
An example of a Freehold Enfranchisement decision for a Ladywell flat is 44 Elmer Road in January 2013. The Tribunal dacied that amount to be paid by the Leaseholders for the Landlords freehold reversion was £12,951 as at the valuation date (20" September 2012).This matter was referred back to the Bromley County Court to deal with costs, fees and any other outstanding matters. This case was in relation to 2 flats. The number of years remaining on the existing lease(s) was 74.25 years.