It’s an underpublicised certainty that a Preston residential lease is a wasting 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 Preston property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining drops under 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Preston will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancing solicitors that we work with undertake Preston 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.
Off the back of unsuccessful discussions with the freeholder of her basement flat in Preston, Mollie started the lease extension process as the eighty year deadline was swiftly approaching. The legal work completed in August 2013. The landlord’s costs were restricted to slightly above four hundred GBP.
Last month we were called by Ms Kelsey Kelly , who completed a ground floor flat in Preston in July 2001. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical properties in Preston with 100 year plus lease were in the region of £280,000. The average amount of ground rent was £55 billed quarterly. The lease came to a finish on 6 January 2104. Having 78 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including expenses.
An example of a Lease Extension case for a Preston premises is Ground Floor Flat 79 London Road in September 2012. the Tribunal held that the premium payable for the lease extension should be £7,636 This case was in relation to 1 flat. The unexpired term as at the valuation date was 74 years.