When it comes to residential leasehold property in Peak District, you are actually buying a right to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are fewer than eighty years remaining. Residents in Peak District with a lease nearing 81 years unexpired should seriously think of extending it without delay. Once the lease term has fewer than 80 years outstanding, under the relevant statute the freeholder is entitled to calculate and demand a greater premium, based on a technical calculation, known as “marriage value” which is due.
It is generally accepted that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Peak District 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.
Twenty four months ago Connor, started to get near to the eighty-year threshold with the lease on his first floor apartment in Peak District. In buying his flat two decades ago, the lease term was of no importance. Luckily, he noticed he would imminently be paying way over the odds for a lease extension. Connor was able to extend his lease at the eleventh hour last June. Connor and the landlord who owned the flat above in the end agreed on sum of £5,500 . If he had missed the deadline, the figure would have increased by at least £1,000.
In 2009 we were contacted by Mr and Mrs. D Nelson who, having was assigned a lease of a basement apartment in Peak District in November 2005. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Similar homes in Peak District with 100 year plus lease were valued around £173,800. The mid-range amount of ground rent was £65 invoiced per annum. The lease elapsed in 2081. Taking into account 55 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 not including legals.
Last Summer we were called by Mr and Mrs. C Bailey , who was assigned a lease of a garden apartment in Peak District in March 1997. The question was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar flats in Peak District with an extended lease were in the region of £235,200. The mid-range amount of ground rent was £45 billed annually. The lease ended in 2092. Considering the 66 years outstanding we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus costs.