Lanchester leases on residential deteriorating in value. Where your lease has about 90 years remaining, you should start considering the need for a lease extension. If lease term falls under eighty years, you will then have to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Lanchester will mostly be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to check if you qualify. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is triggered so it’s wise to be guided by a conveyancing solicitor during the process.
It is generally considered that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you better control over the value of your Lanchester leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Eli owned a 2 bedroom apartment in Lanchester being marketed with a lease of just over 59 years unexpired. Eli informally contacted his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Eli to invoke his statutory right. Eli procured expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
Last Christmas we were phoned by Dr D Stewart , who owned a studio apartment in Lanchester in July 2012. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparative flats in Lanchester with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 invoiced monthly. The lease ran out in 2100. Considering the 75 years as a residual term we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.
Mrs S Ramírez completed a purpose-built apartment in Lanchester in October 2009. The question was if we could approximate the premium would be to extend the lease by a further 90 years. Comparative flats in Lanchester with 100 year plus lease were worth £173,800. The average ground rent payable was £60 billed annually. The lease elapsed in 2080. Considering the 55 years unexpired we calculated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of professional charges.