With a residential leasehold premises in Marks Gate, you are actually purchasing an entitlement to live in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater particularly once there are fewer than eighty years left. Residents in Marks Gate with a lease approaching 81 years remaining should seriously consider extending it without delay. Once a lease has under 80 years outstanding, under the current legislation the landlord can calculate and demand a greater premium, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold premises in Marks Gate with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
The conveyancers that we work with undertake Marks Gate 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.
Off the back of protracted correspondence with the freeholder of her purpose-built flat in Marks Gate, Zoe started the lease extension process as the eighty year threshold was quickly coming. The transaction completed in June 2011. The landlord’s costs were kept to an absolute minimum.
Mrs Aimee Khan moved into a first floor flat in Marks Gate in March 2001. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Similar homes in Marks Gate with 100 year plus lease were valued around £295,000. The average ground rent payable was £45 billed annually. The lease lapsed in 2100. Given that there were 74 years remaining we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including costs.
An example of a Lease Extension decision for a Marks Gate residence is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case related to 1 flat. The unexpired term was 61.36 years.