It’s a harsh truth that a Peak District residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Peak District property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining dips below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Peak District will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Peak District can be a difficult process. We recommend you obtain professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Peak District lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Ibrahim, came critically near to the eighty-year threshold with the lease on his ground floor flat in Peak District. Having bought his home two decades ago, the unexpired term was of little relevance. Fortunately, he became aware that he needed to take action soon on a lease extension. Ibrahim extended the lease just ahead of time in April. Ibrahim and the landlord who owned the flat above in the end agreed on a premium of £5,500 . If the lease had dropped lower than eighty years, the price would have become more costly by a minimum £850.
Last month we were approach by Mrs Zoe Lambert , who completed a first floor flat in Peak District in November 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Comparative homes in Peak District with an extended lease were valued around £270,000. The average amount of ground rent was £55 billed yearly. The lease lapsed in 2100. Having 74 years left we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.
Last year we were contacted by Ms T Adams , who took over the lease of a ground floor flat in Peak District in July 2000. We are asked if we could estimate the price could be to prolong the lease by a further 90 years. Comparative homes in Peak District with a long lease were worth £166,400. The mid-range amount of ground rent was £60 invoiced yearly. The lease lapsed in 2080. Considering the 54 years remaining we estimated the premium to the landlord to extend the lease to be between £32,300 and £37,400 not including costs.