Lapworth 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 the lease becomes more expensive. It is the case that most Lapworth tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Lapworth you must see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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 Lapworth can be a difficult process. We recommend you get professional help from a conveyancing solicitor 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 Lapworth lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Evan, started to get near to the eighty-year threshold with the lease on his first floor apartment in Lapworth. Having purchased his flat twenty years ago, the lease term was of little bearing. by good luck, he realised he needed to take steps soon on a lease extension. Evan was able to extend his lease at the eleventh hour last June. Evan and the landlord subsequently agreed on sum of £5,500 . If the lease had descended below eighty years, the amount would have escalated by at least £1,000.
Last Summer we were called by Ms T Sánchez , who purchased a ground floor flat in Lapworth in April 1997. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Identical homes in Lapworth with an extended lease were worth £275,000. The average ground rent payable was £55 invoiced annually. The lease terminated on 1 July 2102. Considering the 76 years remaining we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.
Last Christmas we were called by Dr I Simon , who purchased a studio apartment in Lapworth in September 1995. The question was if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparable properties in Lapworth with a long lease were in the region of £176,200. The average ground rent payable was £65 collected quarterly. The lease terminated on 25 October 2082. Given that there were 56 years outstanding we estimated the premium to the landlord for the lease extension to be between £29,500 and £34,000 plus costs.