It’s an underpublicised truth that a Langley residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Langley property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If the number of years remaining dips under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Langley will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Langley 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.
Last year Finley, came critically close to the 80-year threshold with the lease on his two bedroom apartment in Langley. Having purchased his flat twenty years ago, the lease term was of minimal importance. by good luck, he noticed he would soon be paying an escalated premium for a lease extension. Finley arranged for a lease extension just under the wire last January. Finley and the landlord eventually settled on an amount of £5,500 . If the lease had slid below eighty years, the figure would have become more exhorbitant by at least £1,000.
In 2012 we were contacted by Mr Aaron Clark who, having completed a first floor flat in Langley in June 1996. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Similar flats in Langley with an extended lease were valued around £260,200. The mid-range amount of ground rent was £65 invoiced yearly. The lease terminated on 10 April 2092. Given that there were 66 years left we estimated the premium to the landlord to extend the lease to be within £15,200 and £17,600 not including fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Langley residence is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case was in relation to 2 flats. The unexpired lease term was 69 years.