It’s a harsh truth that a Navenby residential lease is a wasting 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 Navenby property prices.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining drops under 80 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 additional value that a lease extension will add the property The majority of flat owners in Navenby will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Navenby leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Liam owned a high value flat in Navenby being marketed with a lease of a little over 59 years outstanding. Liam on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Liam to exercise his statutory right. Liam obtained expert advice and was able to make an informed decision and handle with the matter and sell the property.
In 2010 we were approached by Dr Poppy Bailey who, having bought a one bedroom apartment in Navenby in June 1996. The question was if we could approximate the price would likely be to prolong the lease by 90 years. Identical residencies in Navenby with a long lease were worth £216,000. The average ground rent payable was £60 billed every twelve months. The lease ran out in 2083. Taking into account 58 years remaining we estimated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.
Mrs H Kelly bought a first floor apartment in Navenby in July 2005. We are asked if we could estimate the price would be for a ninety year lease extension. Identical residencies in Navenby with an extended lease were in the region of £200,000. The average ground rent payable was £50 invoiced every twelve months. The lease elapsed in 2103. Considering the 78 years outstanding we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including professional charges.