The re-sale value of a leasehold property in Murton depends on how many years the lease has left to run. If it is close to or fewer than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that formalities can be addressed in advance of the 80 year cut off point. Current legislation enables Murton qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Murton with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| 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 |
The conveyancing solicitors that we work with undertake Murton 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.
During the course of the last few months Daniel, came very close to the eighty-year threshold with the lease on his one bedroom apartment in Murton. In buying his property 18 years ago, the unexpired term was of no importance. by good luck, he realised he would soon be paying an inflated amount for a lease extension. Daniel arranged for a lease extension at the eleventh hour last September. Daniel and the landlord who owned the flat above in the end settled on the final figure of £6,000 . If he had missed the deadline, the premium would have gone up by at least £1,000.
In 2012 we were approached by Mrs J Green who, having completed a recently refurbished apartment in Murton in April 2005. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Similar flats in Murton with 100 year plus lease were in the region of £280,000. The average amount of ground rent was £45 collected every twelve months. The lease lapsed on 3 November 2095. Having 70 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including fees.
In 2012 we were approached by Mr and Mrs. Y Johnson who, having bought a garden flat in Murton in September 1999. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Identical premises in Murton with 100 year plus lease were valued about £218,400. The average amount of ground rent was £60 billed per annum. The lease finished on 20 November 2084. Considering the 59 years outstanding we estimated the premium to the landlord to extend the lease to be between £27,600 and £31,800 plus legals.