As the length of the unexpired term of a Ledbury domestic lease lessens so does its value and therefore the value of your property. Where the residual term has, more than 99 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has less than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner rather than later. The majority of flat owners in Ledbury will qualify for this right; that being said a conveyancer should be able to confirm if you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold properties in Ledbury with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you better control over the value of your Ledbury leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Muhammad, came very near to the 80-year threshold with the lease on his studio flat in Ledbury. In buying his home 18 years previously, the length of the lease was of little bearing. by good luck, he realised he would imminently be paying an inflated amount for a lease extension. Muhammad was able to extend his lease just under the wire in April. Muhammad and the landlord ultimately agreed on an amount of £5,000 . If he had missed the deadline, the amount would have gone up by a minimum £1,125.
Mr E Dupont acquired a ground floor apartment in Ledbury in February 2007. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparable flats in Ledbury with 100 year plus lease were valued about £196,400. The average amount of ground rent was £55 collected monthly. The lease ran out on 19 September 2079. Having 54 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £35,200 and £40,600 not including fees.
Ms Sophia Lefèvre was assigned a lease of a garden apartment in Ledbury in May 1998. We are asked if we could approximate the premium could be to prolong the lease by a further 90 years. Comparable residencies in Ledbury with a long lease were valued about £295,000. The average amount of ground rent was £45 billed annually. The lease ended in 2099. Given that there were 74 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.