As the length of the unexpired term of a March residential lease decreases so does its value and therefore the value of your property. Where the residual term has, over 100 years remaining then this decrease may be of little impact nevertheless there will become a point in time when a lease has under than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary logic behind why you should consider extending without delay. The majority of flat owners in March will meet the qualifying criteria; that being said a conveyancer should be able to confirm whether 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 premises in March with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | 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 conveyancing solicitors that we work with undertake March 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.
Subsequent to protracted discussions with the landlord of her purpose-built apartment in March, Alexandra commenced the lease extension process just as the lease was nearing the critical 80-year threshold. The legal work completed in November 2012. The freeholder’s costs were kept to an absolute minimum.
In 2012 we were phoned by Mrs Danielle Evans who, having completed a ground floor flat in March in April 2010. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Similar premises in March with 100 year plus lease were worth £267,600. The mid-range ground rent payable was £65 collected per annum. The lease came to a finish in 2092. Having 67 years unexpired we approximated the premium to the freeholder to extend the lease to be within £14,300 and £16,400 plus fees.
In 2009 we were approached by Mr and Mrs. I Young who, having acquired a basement apartment in March in February 2010. The dilemma was if we could approximate the price would be to extend the lease by an additional years. Similar properties in March with an extended lease were worth £206,200. The average amount of ground rent was £55 collected per annum. The lease concluded in 2081. Considering the 56 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 not including expenses.