It’s a harsh truth that a Lyddington residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Lyddington property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher premium will be payable. Most leasehold owners in Lyddington will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is generally accepted that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Lyddington,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Lyddington valuers.
Riley was the the leasehold proprietor of a conversion apartment in Lyddington being marketed with a lease of fraction over 61 years unexpired. Riley on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Riley to exercise his statutory right. Riley procured expert advice and secured an acceptable deal informally and readily saleable.
Last year we were e-mailed by Mr and Mrs. T Cox , who purchased a one bedroom apartment in Lyddington in November 2003. The question was if we could estimate the premium would likely be to extend the lease by a further 90 years. Identical homes in Lyddington with 100 year plus lease were worth £261,600. The average amount of ground rent was £60 collected monthly. The lease expired on 8 July 2078. Considering the 52 years outstanding we calculated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 not including professional charges.
In 2012 we were contacted by Mr and Mrs. I Lambert who, having was assigned a lease of a first floor apartment in Lyddington in January 2009. The dilemma was if we could estimate the premium could be to prolong the lease by 90 years. Identical homes in Lyddington with a long lease were valued about £218,000. The average amount of ground rent was £45 collected monthly. The lease lapsed in 2089. Considering the 63 years outstanding we calculated the compensation to the landlord for the lease extension to be between £17,100 and £19,800 exclusive of professional charges.