Unfortunately that a Minera residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Minera property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining slips under eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Minera will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Minera with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Minera 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.
Last Christmas Isaac, came seriously close to the eighty-year threshold with the lease on his leasehold apartment in Minera. In buying his flat two decades ago, the length of the lease was of little concern. Thankfully, he became aware that he would soon be paying way over the odds for a lease extension. Isaac extended the lease just under the wire last September. Isaac and the freeholder via the management company subsequently settled on sum of £5,000 . If he not met the deadline, the amount would have become more costly by at least £1,100.
Last month we were contacted by Mr L André , who bought a first floor apartment in Minera in September 2010. The question was if we could approximate the price could be to prolong the lease by an additional years. Identical homes in Minera with a long lease were in the region of £198,400. The mid-range ground rent payable was £65 collected per annum. The lease elapsed on 13 August 2084. Considering the 59 years unexpired we estimated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 plus professional charges.
Last Christmas we were called by Mrs F Morgan , who moved into a ground floor apartment in Minera in August 2000. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Similar premises in Minera with a long lease were valued around £255,000. The mid-range amount of ground rent was £50 billed per annum. The lease ran out in 2095. Having 70 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.