Unfortunately that a Marshfield residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Marshfield property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term dips below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Marshfield will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a landlord in Marshfield,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Marshfield valuers.
Elijah owned a high value flat in Marshfield on the market with a lease of fraction over 59 years remaining. Elijah on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Elijah to invoke his statutory right. Elijah procured expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Mr and Mrs. S Collins purchased a first floor apartment in Marshfield in March 1997. We are asked if we could estimate the price could be to prolong the lease by a further 90 years. Comparative premises in Marshfield with an extended lease were valued around £166,400. The mid-range ground rent payable was £60 billed yearly. The lease came to a finish in 2080. Having 54 years unexpired we approximated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 plus costs.
In 2010 we were e-mailed by Dr H Petit who, having completed a purpose-built flat in Marshfield in May 2002. The dilemma was if we could estimate the premium could be to extend the lease by a further 90 years. Identical flats in Marshfield with an extended lease were valued about £232,800. The average ground rent payable was £45 billed annually. The lease concluded on 9 January 2091. Given that there were 65 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 not including legals.