It’s an underpublicised certainty that a Norwich residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Norwich property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher amount will be payable. Most leasehold owners in Norwich will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold properties in Norwich with over one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate 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. |
| Chelsea 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with handle Norwich 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 conveyancer we work with provide it.
After lengthy discussions with the freeholder of her purpose-built flat in Norwich, Jordan initiated the lease extension process as the eighty year mark was rapidly nearing. The transaction was concluded in April 2009. The freeholder’s charges were restricted to below 700 GBP.
Last Winter we were phoned by Ms Eleanor Wright , who moved into a one bedroom apartment in Norwich in June 2001. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative residencies in Norwich with 100 year plus lease were worth £210,000. The mid-range amount of ground rent was £50 collected monthly. The lease finished in 2106. Considering the 80 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
Mr D Norbert acquired a studio flat in Norwich in February 2006. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparable homes in Norwich with 100 year plus lease were valued around £280,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease termination date was in 2095. Given that there were 69 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including costs.