Margate leases on residential properties are gradually losing value. if your lease has about ninety years remaining, you should start considering the need for a lease extension. If lease term falls under eighty years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Margate will mostly qualify for a lease extension; however a solicitor should be able confirm your eligibility. In certain situations you may not qualify. There are also strict timetables and formalities to follow once the process has commenced so it’s sensible to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Margate can be a difficult process. We recommend you get guidance from a conveyancer and valuer 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 in-depth market knowledge procuring Margate lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Michael, started to get near to the eighty-year threshold with the lease on his one bedroom apartment in Margate. Having bought his flat 19 years previously, the length of the lease was of little interest. As luck would have it, he realised he would soon be paying an escalated premium for a lease extension. Michael extended the lease just under the wire in April. Michael and the landlord eventually agreed on a premium of £5,000 . If the lease had slipped lower than 80 years, the premium would have become more exhorbitant by a minimum £850.
Mr and Mrs. E Petit moved into a newly refurbished apartment in Margate in January 2006. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Identical residencies in Margate with 100 year plus lease were worth £235,200. The average amount of ground rent was £45 invoiced quarterly. The lease came to a finish in 2091. Given that there were 66 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including fees.
Last Spring we were phoned by Mr and Mrs. O Fournier , who purchased a purpose-built apartment in Margate in April 2003. The question was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative premises in Margate with a long lease were in the region of £280,000. The average ground rent payable was £55 invoiced quarterly. The lease lapsed on 4 June 2102. Considering the 77 years outstanding we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of costs.