It’s an underpublicised truth that a Norton 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 reduction being disguised by increases in the Norton property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips below eighty years, you will then be required to pay half 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 extra value that a lease extension will add the property The majority of flat owners in Norton will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| Lloyds TSB Scotland | 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. |
Regardless of whether you are a tenant or a freeholder in Norton,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 Norton valuers.
In recent months Jude, started to get close to the eighty-year threshold with the lease on his leasehold flat in Norton. In buying his property twenty years ago, the unexpired term was of little importance. Thankfully, it dawned on him that he would soon be paying way over the odds for Extending the lease. Jude was able to extend his lease at the eleventh hour in January. Jude and the freeholder subsequently agreed on an amount of £5,000 . If he not met the deadline, the price would have escalated by at least £900.
Last year we were phoned by Mrs Kate King , who was assigned a lease of a one bedroom flat in Norton in November 2010. The question was if we could shed any light on how much (roughly) premium would likely be to extend the lease by ninety years. Comparable properties in Norton with a long lease were in the region of £200,800. The average ground rent payable was £65 collected monthly. The lease finished in 2086. Having 60 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 exclusive of expenses.
Last June we were phoned by Mr and Mrs. P Ward , who owned a garden apartment in Norton in October 2011. The question was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable premises in Norton with an extended lease were valued about £260,000. The mid-range ground rent payable was £50 invoiced yearly. The lease concluded on 27 July 2097. Taking into account 71 years outstanding we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.