It’s an underpublicised truth that a Langstone residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Langstone property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If the number of years remaining falls 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 additional value that a lease extension will add the property The majority of leasehold owners in Langstone will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Using our service gives you enhanced control over the value of your Langstone leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted negotiations with the landlord of her ground floor flat in Langstone, Robyn commenced the lease extension process just as the lease was nearing the crucial eighty-year mark. The lease extension completed in October 2006. The freeholder’s fees were kept to an absolute minimum.
Last month we were phoned by Mr and Mrs. O Lambert , who purchased a one bedroom flat in Langstone in September 2007. The question was if we could estimate the premium could be for a 90 year extension to my lease. Comparative flats in Langstone with 100 year plus lease were in the region of £261,600. The mid-range ground rent payable was £60 billed monthly. The lease finished in 2078. Taking into account 52 years unexpired we estimated the premium to the freeholder for the lease extension to be within £39,000 and £45,000 not including professional charges.
In 2012 we were e-mailed by Mr and Mrs. G Parker who, having was assigned a lease of a garden flat in Langstone in September 2010. The dilemma was if we could estimate the price could be for a 90 year lease extension. Identical properties in Langstone with a long lease were valued about £218,000. The mid-range amount of ground rent was £45 billed per annum. The lease lapsed on 26 May 2089. Considering the 63 years remaining we estimated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 exclusive of legals.