Margate leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Margate residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Margate you really ought to check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
The conveyancing solicitors that we work with undertake Margate 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 conveyancing solicitor we work with provide it.
Half a year ago Tyler, started to get near to the 80-year threshold with the lease on his two bedroom flat in Margate. In buying his property two decades ago, the length of the lease was of no concern. by good luck, he noticed he would imminently be paying an inflated amount for Extending the lease. Tyler was able to extend his lease just under the wire last May. Tyler and the landlord in the end settled on a premium of £6,000 . If he had missed the deadline, the figure would have gone up by at least £950.
Last May we were e-mailed by Dr Eleanor Alexander , who acquired a one bedroom flat in Margate in October 2000. The dilemma was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Identical properties in Margate with an extended lease were worth £208,200. The mid-range amount of ground rent was £65 collected every twelve months. The lease termination date was on 12 July 2086. Given that there were 61 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 plus expenses.
In 2011 we were approached by Ms B David who, having took over the lease of a one bedroom apartment in Margate in October 2010. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical properties in Margate with a long lease were in the region of £260,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease lapsed in 2097. Taking into account 72 years remaining we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including professional charges.