Lake District leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Lake District tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Lake District you should check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold residencies in Lake District with more than one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Lake District can be a difficult process. We recommend you obtain professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Lake District lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Matthew owned a high value apartment in Lake District being marketed with a lease of a few days over 72 years unexpired. Matthew informally contacted his landlord a well known local-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Matthew to invoke his statutory right. Matthew obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the flat.
Last Autumn we were phoned by Mr I Roberts , who moved into a first floor apartment in Lake District in July 2002. The dilemma was if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Similar homes in Lake District with 100 year plus lease were in the region of £216,000. The average ground rent payable was £60 collected quarterly. The lease ran out on 1 March 2084. Having 58 years unexpired we estimated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including expenses.
In 2010 we were called by Mr and Mrs. V Ramírez who, having acquired a basement apartment in Lake District in October 2010. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparative premises in Lake District with an extended lease were worth £200,000. The average ground rent payable was £50 collected every twelve months. The lease terminated in 2104. Considering the 78 years left we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including legals.