Unfortunately that a Peterborough residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Peterborough property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term slips under eighty years, you will end up paying half 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 extra value that a lease extension will add the property Most leasehold owners in Peterborough will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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. |
Engaging our service will provide you increased control over the value of your Peterborough leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Jake, started to get close to the eighty-year mark with the lease on his purpose- built flat in Peterborough. Having bought his home two decades ago, the length of the lease was of no concern. Fortunately, he realised he would imminently be paying an escalated premium for Extending the lease. Jake extended the lease just under the wire last August. Jake and the landlord eventually agreed on a premium of £5,000 . If the lease had slipped lower than 80 years, the premium would have become more costly by a minimum £950.
Last Spring we were e-mailed by Mrs M Leroy , who owned a first floor flat in Peterborough in January 2002. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Comparable properties in Peterborough with a long lease were valued about £250,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease concluded in 2093. Having 68 years remaining we approximated the premium to the landlord for the lease extension to be between £10,500 and £12,000 plus expenses.
In 2010 we were e-mailed by Mrs Ellie Bernard who, having acquired a one bedroom apartment in Peterborough in February 2006. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative residencies in Peterborough with 100 year plus lease were worth £285,000. The average ground rent payable was £55 billed monthly. The lease ended on 20 October 2104. Taking into account 79 years unexpired we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including legals.