It’s an underpublicised truth that a Redland 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 depreciation being disguised by increases in the Redland property market.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining drops under 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 additional value that a lease extension will add the property The majority of flat owners in Redland will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the process.
It is generally accepted that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Leeds Building Society | 85 years remaining from the start 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Using our service gives you enhanced control over the value of your Redland leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy correspondence with the landlord of her ground floor apartment in Redland, Rachel commenced the lease extension process as the 80 year deadline was quickly advancing. The transaction was finalised in October 2015. The freeholder’s fees were kept to an absolute minimum.
Dr Michael Lewis completed a purpose-built apartment in Redland in August 2003. The question was if we could approximate the premium would likely be to extend the lease by ninety years. Comparable residencies in Redland with a long lease were in the region of £285,000. The average ground rent payable was £55 billed annually. The lease expired in 2105. Having 79 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus expenses.
Last Summer we were phoned by Dr Ali Johnson , who acquired a studio apartment in Redland in October 2003. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Identical residencies in Redland with an extended lease were valued around £193,400. The mid-range amount of ground rent was £65 invoiced yearly. The lease terminated in 2085. Having 59 years left we calculated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of fees.