It’s a harsh certainty that a Preston residential lease is a wasting asset. The lease value drops 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 Preston property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term slips 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. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Preston will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Preston with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you increased control over the value of your Preston leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Max owned a conversion flat in Preston being marketed with a lease of fraction over fifty eight years left. Max informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Max to exercise his statutory right. Max procured expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
In 2011 we were phoned by Dr J Lewis who, having acquired a basement flat in Preston in September 2006. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Similar properties in Preston with an extended lease were worth £176,200. The mid-range ground rent payable was £65 collected monthly. The lease lapsed on 3 July 2081. Considering the 56 years remaining we calculated the compensation to the landlord to extend the lease to be between £29,500 and £34,000 exclusive of costs.
An example of a Lease Extension case for a Preston property 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 related to 1 flat. The unexpired term as at the valuation date was 74 years.