It’s a harsh truth that a North Ferriby residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the North Ferriby property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining slips below eighty years, you will then be required to pay 50% 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 North Ferriby will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 lawyers that we work with handle North Ferriby 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.
Last year Nathan, came seriously close to the eighty-year threshold with the lease on his leasehold apartment in North Ferriby. Having purchased his home twenty years previously, the unexpired term was of no interest. Thankfully, he noticed he needed to take action soon on a lease extension. Nathan extended the lease just under the wire last April. Nathan and the landlord who owned the flat above subsequently settled on an amount of £6,000 . If the lease had descended lower than 80 years, the premium would have increased by at least £875.
Last Winter we were called by Dr Harvey Ricardo , who purchased a purpose-built flat in North Ferriby in April 2005. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Comparable residencies in North Ferriby with an extended lease were valued about £255,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease elapsed on 27 June 2095. Taking into account 70 years left we estimated the compensation to the freeholder for the lease extension to be within £10,500 and £12,000 exclusive of fees.
In 2011 we were called by Mr J Clark who, having moved into a one bedroom flat in North Ferriby in June 1995. The question was if we could estimate the price would likely be to extend the lease by ninety years. Comparative properties in North Ferriby with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 billed per annum. The lease expired in 2075. Having 50 years left we approximated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 not including legals.