Unfortunately that a Lydiate 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 early years due to the depreciation being disguised by increases in the Lydiate property prices.Once your lease nears 85ish years, you should 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 slips under eighty years - otherwise a higher premium will be payable. The majority of flat owners in Lydiate will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Yorkshire 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. |
The conveyancers that we work with undertake Lydiate 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 conveyancer we work with provide it.
Edward owned a high value flat in Lydiate being sold with a lease of a little over 59 years outstanding. Edward on an informal basis approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Edward to exercise his statutory right. Edward obtained expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Last Christmas we were called by Mr and Mrs. C Rose , who bought a recently refurbished flat in Lydiate in September 1997. We are asked if we could approximate the price would likely be for a 90 year lease extension. Similar flats in Lydiate with an extended lease were in the region of £295,000. The average ground rent payable was £45 billed monthly. The lease expired on 26 September 2099. Considering the 74 years left we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
Last Christmas we were approach by Ms C Allen , who was assigned a lease of a garden apartment in Lydiate in February 2004. We are asked if we could estimate the price would be for a 90 year lease extension. Identical properties in Lydiate with a long lease were valued around £243,000. The average ground rent payable was £65 invoiced per annum. The lease came to a finish on 23 February 2088. Having 63 years left we calculated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 plus expenses.