As the length of the unexpired term of a Parson Cross domestic lease lessens so does its value and therefore the value of your property. If the residual term has, beyond 100 years remaining then this decrease may be of little impact nevertheless there will become a stage when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should consider extending sooner rather than later. Most flat owners in Parson Cross will qualify for this right; however a conveyancer can confirm if you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Parson Cross 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 lawyer we work with provide it.
Following protracted discussions with the freeholder of her two bedroom flat in Parson Cross, Jennifer commenced the lease extension process as the eighty year threshold was quickly coming. The lease extension was finalised in November 2011. The landlord’s charges were kept to an absolute minimum.
Dr James Rodríguez was assigned a lease of a purpose-built apartment in Parson Cross in February 2010. We are asked if we could approximate the premium could be for a 90 year lease extension. Comparative homes in Parson Cross with a long lease were valued around £225,400. The mid-range amount of ground rent was £45 collected per annum. The lease lapsed in 2089. Considering the 64 years left we calculated the premium to the landlord to extend the lease to be within £15,200 and £17,600 exclusive of professional charges.
In 2011 we were contacted by Dr R André who, having took over the lease of a one bedroom flat in Parson Cross in January 2005. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar flats in Parson Cross with 100 year plus lease were worth £270,000. The average amount of ground rent was £55 collected monthly. The lease terminated in 2100. Considering the 75 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.