Unfortunately that a Paulton residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Paulton property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term falls below 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Paulton will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold properties in Paulton with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Paulton 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 conveyancing solicitor we work with provide it.
In recent months Caleb, came perilously close to the eighty-year mark with the lease on his two bedroom apartment in Paulton. Having bought his home 18 years ago, the unexpired term was of minimal interest. Luckily, he became aware that he needed to take steps soon on a lease extension. Caleb was able to extend his lease just in the nick of time in March. Caleb and the freeholder in the end settled on a premium of £6,000 . If the lease had dropped to less than eighty years, the sum would have become more exhorbitant by a minimum £1,050.
Last Spring we were e-mailed by Dr Michael Jones , who was assigned a lease of a garden apartment in Paulton in January 2008. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Comparative residencies in Paulton with a long lease were valued about £270,000. The average ground rent payable was £55 invoiced monthly. The lease elapsed on 12 January 2101. Having 75 years remaining we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of fees.
In 2014 we were approached by Dr Courtney Khan who, having owned a studio flat in Paulton in February 1995. We are asked if we could estimate the price could be to extend the lease by ninety years. Comparable homes in Paulton with a long lease were worth £168,800. The average amount of ground rent was £60 invoiced yearly. The lease finished in 2081. Considering the 55 years as a residual term we approximated the premium to the landlord for the lease extension to be within £30,400 and £35,200 not including fees.