Unfortunately that a Retford residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Retford property market.Where your lease has approximately ninety years left, you should start considering 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 slips below eighty years - otherwise a higher amount will be payable. The majority of flat owners in Retford will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is generally considered that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Retford,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Retford valuers.
Mason owned a 2 bedroom flat in Retford on the market with a lease of a little over 61 years outstanding. Mason on an informal basis spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Mason to exercise his statutory right. Mason procured expert advice and was able to make an informed decision and handle with the matter and readily saleable.
In 2013 we were called by Mrs Melissa Brown who, having bought a one bedroom flat in Retford in October 2003. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Identical homes in Retford with an extended lease were valued around £257,800. The average amount of ground rent was £65 collected every twelve months. The lease came to a finish in 2090. Having 65 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £18,100 and £20,800 exclusive of expenses.
Mr and Mrs. B Davis bought a garden flat in Retford in April 2004. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Similar residencies in Retford with 100 year plus lease were valued about £191,400. The average amount of ground rent was £55 billed annually. The lease finished on 1 January 2079. Taking into account 54 years outstanding we estimated the premium to the freeholder to extend the lease to be between £34,200 and £39,600 exclusive of costs.