Unfortunately that a Redhill 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 early years due to the loss of value being disguised by increases in the Redhill property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term falls below eighty 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 extra value that a lease extension will add the property The majority of leasehold owners in Redhill will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage 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. |
Retaining our service will provide you enhanced control over the value of your Redhill leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Nathan, started to get close to the 80-year mark with the lease on his two bedroom apartment in Redhill. Having bought his home two decades ago, the length of the lease was of no significance. As luck would have it, he realised he would soon be paying an inflated amount for Extending the lease. Nathan arranged for a lease extension at the eleventh hour in March. Nathan and the landlord eventually agreed on an amount of £6,000 . If the lease had slid below eighty years, the sum would have increased by a minimum £900.
In 2013 we were contacted by Mr and Mrs. G James who, having acquired a first floor apartment in Redhill in November 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by 90 years. Similar flats in Redhill with a long lease were valued about £280,000. The average ground rent payable was £55 billed quarterly. The lease came to a finish in 2104. Considering the 78 years remaining we approximated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including fees.
Last Winter we were e-mailed by Mr and Mrs. K Davis , who took over the lease of a first floor apartment in Redhill in January 1996. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical homes in Redhill with an extended lease were worth £186,000. The mid-range amount of ground rent was £65 collected per annum. The lease finished in 2084. Having 58 years remaining we estimated the compensation to the freeholder for the lease extension to be within £24,700 and £28,600 not including professional charges.