Normanton leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Normanton residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Normanton you really ought to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Normanton with in excess of one hundred years remaining 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 home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a freeholder in Normanton,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Normanton valuers.
Subsequent to lengthy correspondence with the freeholder of her garden apartment in Normanton, Eleanor started the lease extension process just as her lease was coming close to the all-important eighty-year deadline. The legal work completed in April 2010. The freeholder’s fees were restricted to approximately 550 GBP.
Mr B Anderson moved into a first floor flat in Normanton in November 2002. We are asked if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Comparative flats in Normanton with 100 year plus lease were worth £168,800. The average amount of ground rent was £60 collected monthly. The lease expired on 19 November 2081. Considering the 55 years left we approximated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of expenses.
Ms Courtney Murphy owned a recently refurbished flat in Normanton in August 1997. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by an additional years. Similar residencies in Normanton with an extended lease were worth £235,200. The mid-range ground rent payable was £45 billed annually. The lease ran out in 2092. Taking into account 66 years outstanding we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.