Unfortunately 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 loss of value being disguised by increases in the Preston property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. Most leasehold owners in Preston will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
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.
Trailing lengthy discussions with the freeholder of her one bedroom apartment in Preston, Natalie started the lease extension process as the 80 year deadline was quickly approaching. The legal work was finalised in May 2011. The freeholder’s charges were kept to an absolute minimum.
In 2012 we were approached by Ms Lucy Simon who, having took over the lease of a one bedroom apartment in Preston in October 2000. We are asked if we could approximate the price would likely be to extend the lease by 90 years. Comparative homes in Preston with a long lease were valued about £285,000. The mid-range amount of ground rent was £55 collected annually. The lease lapsed on 11 November 2105. Considering the 80 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Preston flat 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 affected 1 flat. The number of years remaining on the existing lease(s) was 74 years.