Prestbury leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Prestbury residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Prestbury you would be well advised to see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Prestbury leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas William, came very close to the eighty-year mark with the lease on his first floor apartment in Prestbury. In buying his flat 18 years previously, the lease term was of no importance. As luck would have it, he recognised he needed to take action soon on a lease extension. William extended the lease just in the nick of time last January. William and the landlord subsequently settled on an amount of £5,000 . If he had missed the deadline, the price would have increased by a minimum £1,100.
Last year we were phoned by Mr and Mrs. S François , who completed a first floor apartment in Prestbury in January 2002. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Identical flats in Prestbury with a long lease were valued around £260,000. The mid-range ground rent payable was £50 billed every twelve months. The lease came to a finish on 21 August 2097. Given that there were 71 years remaining we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.
In 2010 we were approached by Ms Jodie Ali who, having completed a purpose-built flat in Prestbury in May 2008. The question was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Identical flats in Prestbury with an extended lease were in the region of £254,200. The mid-range ground rent payable was £60 billed per annum. The lease lapsed on 9 February 2077. Taking into account 51 years remaining we calculated the premium to the landlord for the lease extension to be within £43,700 and £50,600 plus expenses.