Old Town leases on residential deteriorating in value. Where your lease has about 90 years remaining, you should start thinking about a lease extension. If lease term is under eighty 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 your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Old Town will usually be legally entitled to a lease extension; however It would be wise to check with a conveyancer to confirm if you qualify. In some cases you may not be entitled. There are prescribed deadlines and procedures to comply with once the process is triggered so it’s best to be guided by a conveyancing solicitor during the process.
Leasehold properties in Old Town with over 100 years outstanding on the lease are sometimes 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 freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 better control over the value of your Old Town leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Owen was the the leasehold owner of a conversion apartment in Old Town being sold with a lease of a few days over 72 years unexpired. Owen on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Owen to exercise his statutory right. Owen procured expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Mr and Mrs. M Ricardo owned a garden flat in Old Town in March 2009. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Comparable homes in Old Town with an extended lease were worth £181,600. The mid-range ground rent payable was £55 billed monthly. The lease ran out in 2077. Having 52 years left we calculated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of costs.
Mr Connor Michel bought a garden apartment in Old Town in April 2003. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparative homes in Old Town with a long lease were worth £285,000. The average ground rent payable was £45 invoiced per annum. The lease finished on 4 February 2097. Considering the 72 years remaining we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 plus costs.