There is no doubt about it a leasehold flat or house in Nelson is a wasting asset as a result of the diminishing lease term. Where the residual term has, more than 99 years to run then this decrease may be of little impact nevertheless there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should consider extending sooner than later. Many flat owners in Nelson will meet the qualifying criteria; that being said a lawyer will be able to advise if you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold residencies in Nelson with more than 100 years remaining 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 property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance 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 are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Nelson 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.
Dylan owned a studio flat in Nelson on the market with a lease of a little over 72 years remaining. Dylan informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dylan to exercise his statutory right. Dylan obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
In 2014 we were approached by Mr P André who, having bought a first floor apartment in Nelson in October 2007. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Comparative flats in Nelson with 100 year plus lease were in the region of £166,800. The mid-range ground rent payable was £50 invoiced monthly. The lease terminated on 12 October 2076. Having 50 years outstanding we estimated the compensation to the landlord for the lease extension to be within £32,300 and £37,400 not including expenses.
Mr and Mrs. B Stewart purchased a ground floor apartment in Nelson in April 2011. We are asked if we could estimate the premium could be to extend the lease by ninety years. Comparable flats in Nelson with 100 year plus lease were in the region of £280,000. The average ground rent payable was £45 billed every twelve months. The lease termination date was in 2096. Considering the 70 years left we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of fees.