It’s an underpublicised certainty that a Northleach 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 early years due to the loss of value being disguised by increases in the Northleach property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining slips under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to 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 flat owners in Northleach will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| 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. |
Using our service will provide you enhanced control over the value of your Northleach leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of unsuccessful discussions with the landlord of her studio flat in Northleach, Poppy started the lease extension process as the 80 year mark was swiftly nearing. The transaction was concluded in August 2013. The freeholder’s charges were negotiated to approximately 700 pounds.
Last Summer we were contacted by Mrs P Gómez , who completed a one bedroom flat in Northleach in September 1995. We are asked if we could approximate the price could be for a ninety year lease extension. Comparable flats in Northleach with 100 year plus lease were valued around £201,200. The mid-range ground rent payable was £55 billed monthly. The lease ran out on 15 September 2082. Having 56 years left we calculated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 plus expenses.
Last month we were approach by Mr Alfie King , who bought a first floor apartment in Northleach in May 2000. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparable homes in Northleach with an extended lease were worth £300,000. The average amount of ground rent was £50 invoiced quarterly. The lease lapsed in 2102. Considering the 76 years outstanding we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of legals.