Unfortunately that a South Petherton residential lease is a deteriorating 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 South Petherton property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term falls under 80 years, you will end up paying half 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 South Petherton will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for decades to come.
| 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 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in South Petherton,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with South Petherton valuers.
Last year Seth, started to get close to the 80-year threshold with the lease on his two bedroom apartment in South Petherton. In buying his home 18 years previously, the length of the lease was of minimal significance. by good luck, he recognised he would soon be paying an inflated amount for a lease extension. Seth arranged for a lease extension just under the wire in June. Seth and the freeholder via the management company in the end settled on an amount of £5,500 . If the lease had descended lower than eighty years, the premium would have increased by at least £850.
In 2012 we were e-mailed by Mr and Mrs. D Scott who, having completed a studio flat in South Petherton in November 2005. We are asked if we could estimate the price could be to extend the lease by ninety years. Comparable residencies in South Petherton with a long lease were valued around £260,000. The mid-range amount of ground rent was £50 collected per annum. The lease came to a finish on 1 April 2098. Given that there were 72 years remaining we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.
Mr G James was assigned a lease of a purpose-built apartment in South Petherton in June 2010. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by 90 years. Identical properties in South Petherton with an extended lease were in the region of £256,600. The average amount of ground rent was £60 collected every twelve months. The lease expired in 2078. Having 52 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £39,000 and £45,000 not including professional charges.