It’s an underpublicised truth that a Soham residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Soham property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining dips below 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Soham will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold premises in Soham with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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 |
| 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. |
The conveyancers that we work with handle Soham 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.
Daniel was the the leasehold owner of a high value apartment in Soham being marketed with a lease of fraction over sixty years left. Daniel informally approached his freeholder a well known London-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 an increased rent to £125 per annum. No ground rent would be due on a lease extension were Daniel to exercise his statutory right. Daniel obtained expert advice and secured satisfactory deal informally and sell the flat.
Mr and Mrs. K Bailey acquired a one bedroom flat in Soham in June 2010. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar flats in Soham with an extended lease were in the region of £255,000. The mid-range amount of ground rent was £50 billed monthly. The lease lapsed in 2096. Given that there were 70 years left we estimated the premium to the landlord for the lease extension to be between £10,500 and £12,000 plus costs.
In 2012 we were contacted by Mr and Mrs. H Khan who, having was assigned a lease of a garden flat in Soham in June 2009. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Similar properties in Soham with 100 year plus lease were worth £246,800. The mid-range ground rent payable was £60 collected annually. The lease concluded in 2076. Having 50 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 exclusive of expenses.