Unfortunately that a Preston residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Preston property market.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term falls below eighty years, you will end up paying 50% 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 leasehold 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 conveyancing solicitor for the duration of the process.
Leasehold residencies in Preston with over 100 years outstanding on the lease are often 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 purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
The lawyers 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.
During the course of the last few months Leo, came dangerously close to the 80-year mark with the lease on his purpose- built apartment in Preston. In buying his home two decades ago, the lease term was of little importance. Fortunately, he noticed he would soon be paying way over the odds for a lease extension. Leo was able to extend his lease at the eleventh hour last July. Leo and the landlord subsequently settled on an amount of £5,000 . If the lease had fallen lower than eighty years, the premium would have gone up by at least £950.
Mrs T Moreau was assigned a lease of a first floor flat in Preston in June 1995. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Similar homes in Preston with a long lease were in the region of £245,000. The average amount of ground rent was £50 invoiced monthly. The lease ended in 2093. Given that there were 68 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.
An example of a Lease Extension matter before the tribunal 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 was 74 years.