Unfortunately that a South Molton residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the South Molton property market.Where your lease has approximately 90 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 falls below eighty years - otherwise a higher premium will be payable. The majority of flat owners in South Molton will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake South Molton 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 lawyer we work with provide it.
After protracted correspondence with the freeholder of her ground floor apartment in South Molton, Hollie commenced the lease extension process as the eighty year threshold was quickly nearing. The legal work was finalised in September 2012. The freeholder’s fees were kept to an absolute minimum.
In 2012 we were contacted by Mr and Mrs. G Fournier who, having owned a one bedroom apartment in South Molton in July 2009. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable flats in South Molton with a long lease were valued around £200,000. The average ground rent payable was £50 billed yearly. The lease ended on 22 April 2104. Given that there were 78 years unexpired we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including expenses.
Mr E Simon completed a one bedroom apartment in South Molton in July 2003. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Comparable homes in South Molton with 100 year plus lease were worth £267,600. The average ground rent payable was £65 invoiced yearly. The lease lapsed in 2093. Considering the 67 years remaining we estimated the compensation to the landlord for the lease extension to be within £14,300 and £16,400 plus fees.