Unfortunately that a Street residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Street property market.Where your lease has approximately ninety years left, you need to 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 lower than eighty years - otherwise a higher amount will be due. The majority of flat owners in Street will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Irrespective of whether you are a tenant or a landlord in Street,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Street valuers.
John was the the leasehold proprietor of a studio apartment in Street on the market with a lease of fraction over fifty eight years left. John informally spoke with his landlord a well known London-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were John to invoke his statutory right. John obtained expert advice and secured an acceptable deal informally and readily saleable.
Dr Lucy King moved into a ground floor apartment in Street in January 1996. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Similar properties in Street with a long lease were valued about £265,200. The mid-range ground rent payable was £65 collected per annum. The lease end date was on 14 November 2092. Taking into account 66 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £15,200 and £17,600 exclusive of professional charges.
Mr and Mrs. N Morris acquired a newly refurbished apartment in Street in March 1995. The question was if we could approximate the price could be for a 90 year lease extension. Identical properties in Street with a long lease were worth £198,800. The mid-range amount of ground rent was £55 collected annually. The lease concluded on 24 June 2081. Having 55 years unexpired we estimated the premium to the landlord to extend the lease to be within £33,300 and £38,400 exclusive of legals.