Parkstone leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Parkstone enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Parkstone you must see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Parkstone with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 gives you increased control over the value of your Parkstone leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Ollie was the the leasehold owner of a 2 bedroom flat in Parkstone being sold with a lease of just over sixty years remaining. Ollie informally spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Ollie to invoke his statutory right. Ollie procured expert advice and was able to make an informed decision and handle with the matter and readily saleable.
Mr and Mrs. D Thompson acquired a one bedroom flat in Parkstone in February 2009. The dilemma was if we could approximate the price would likely be to extend the lease by an additional years. Identical residencies in Parkstone with a long lease were worth £225,400. The mid-range amount of ground rent was £45 invoiced yearly. The lease came to a finish on 11 April 2089. Taking into account 64 years unexpired we approximated the premium to the landlord for the lease extension to be within £15,200 and £17,600 not including costs.
In 2009 we were e-mailed by Mr E Garcia who, having acquired a studio flat in Parkstone in May 2012. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by ninety years. Comparative premises in Parkstone with 100 year plus lease were in the region of £270,000. The average amount of ground rent was £55 collected yearly. The lease elapsed in 2100. Taking into account 75 years left we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.