Silverton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Silverton tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Silverton you should see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Silverton with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Lease extensions in Silverton can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Silverton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following unsuccessful correspondence with the freeholder of her studio flat in Silverton, Victoria commenced the lease extension process as the 80 year threshold was fast coming. The transaction was concluded in November 2011. The freeholder’s charges were restricted to approximately 600 pounds.
Last Spring we were contacted by Mr and Mrs. D François , who bought a ground floor apartment in Silverton in September 1996. The dilemma was if we could shed any light on how much (approximately) price would likely be to extend the lease by an additional years. Similar homes in Silverton with a long lease were valued around £200,000. The average ground rent payable was £50 billed annually. The lease came to a finish on 27 November 2103. Given that there were 77 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus fees.
In 2009 we were e-mailed by Mrs Kayleigh Miller who, having moved into a newly refurbished flat in Silverton in May 2008. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparable homes in Silverton with an extended lease were worth £260,200. The average amount of ground rent was £65 invoiced monthly. The lease concluded in 2092. Having 66 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £16,200 and £18,600 plus legals.