It’s a harsh certainty that a Sturminster Newton residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Sturminster Newton property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining drops under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to 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 Most leasehold owners in Sturminster Newton will be able to extend under the legislation; however a lawyer will be able to confirm whether 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 conveyancer for the duration of the process.
Leasehold residencies in Sturminster Newton with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure Sturminster Newton 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 conveyancing solicitor we work with provide it.
Trailing unsuccessful discussions with the landlord of her purpose-built apartment in Sturminster Newton, Anna started the lease extension process just as the lease was approaching the crucial 80-year mark. The transaction completed in March 2012. The landlord’s costs were kept to an absolute minimum.
Last Winter we were e-mailed by Dr Oliver Leroy , who was assigned a lease of a basement apartment in Sturminster Newton in April 2003. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparative premises in Sturminster Newton with a long lease were worth £290,000. The mid-range amount of ground rent was £45 collected per annum. The lease end date was in 2098. Taking into account 72 years left we calculated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 not including expenses.
In 2011 we were approached by Dr Rachael Petit who, having was assigned a lease of a purpose-built flat in Sturminster Newton in June 2005. The question was if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Comparable homes in Sturminster Newton with a long lease were valued about £233,200. The mid-range ground rent payable was £60 collected every twelve months. The lease concluded on 23 January 2087. Having 61 years left we approximated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 exclusive of expenses.