It’s a harsh truth that a Radstock 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 deflation being disguised by increases in the Radstock property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term drops below 80 years, you will end up paying half of the property's 'marriage value' on top of 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 Radstock will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| 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 |
The lawyers that we work with handle Radstock 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 conveyancer we work with provide it.
Finn was the the leasehold owner of a conversion flat in Radstock being marketed with a lease of a little over 59 years left. Finn on an informal basis approached his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. No ground rent would be due on a lease extension were Finn to invoke his statutory right. Finn procured expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
In 2010 we were contacted by Mr Kyle Wilson who, having moved into a studio apartment in Radstock in April 2000. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Similar homes in Radstock with a long lease were valued around £254,200. The mid-range ground rent payable was £60 invoiced per annum. The lease termination date was in 2077. Considering the 51 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 exclusive of fees.
Ms Daisy Bennett purchased a garden apartment in Radstock in April 1997. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Comparative properties in Radstock with a long lease were valued about £210,600. The mid-range ground rent payable was £45 collected monthly. The lease concluded in 2088. Considering the 62 years remaining we estimated the compensation to the freeholder to extend the lease to be between £18,100 and £20,800 exclusive of fees.