Marks Gate leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Marks Gate residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Marks Gate you would be well advised to see if your lease has between 70 and ninety years remaining. There are good reasons why a Marks Gate flat owner with a lease having around 80 years remaining should take action to make sure that a lease extension is effected without delay
Leasehold properties in Marks Gate with more than 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| 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; |
| 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. |
| 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. |
The conveyancing solicitors that we work with handle 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 conveyancing solicitor we work with provide it.
Two years ago Felix, came very close to the eighty-year mark with the lease on his first floor apartment in Marks Gate. Having purchased his property two decades ago, the unexpired term was of no concern. by good luck, he became aware that he would soon be paying an escalated premium for Extending the lease. Felix extended the lease just under the wire last March. Felix and the landlord eventually settled on sum of £5,000 . If the lease had slid to less than 80 years, the figure would have gone up by at least £1,075.
In 2010 we were approached by Ms S Gunderson who, having bought a one bedroom flat in Marks Gate in May 1996. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by an additional years. Comparable premises in Marks Gate with an extended lease were worth £210,000. The average ground rent payable was £50 billed per annum. The lease terminated in 2105. Taking into account 80 years left we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 not including fees.
An example of a Lease Extension matter before the tribunal for a Marks Gate property 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 affected 1 flat. The unexpired term as at the valuation date was 61.36 years.