Swanage leases on domestic properties are gradually losing value. if your lease has about 90 years unexpired, you should start thinking about a lease extension. If lease term is less than eighty 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 to the property. Leasehold owners in Swanage will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In certain circumstances you may not be entitled. There are prescribed timetables and procedures to follow once the process has commenced so it’s best to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Swanage,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Swanage valuers.
In the wake of 9 months of lengthy discussions with the freeholder of her studio flat in Swanage, Amber started the lease extension process just as the lease was approaching the all-important eighty-year deadline. The legal work was concluded in August 2008. The freeholder’s charges were negotiated to slightly above 450 GBP.
Mr and Mrs. T Cooper was assigned a lease of a one bedroom flat in Swanage in February 2003. We are asked if we could approximate the price could be for a 90 year extension to my lease. Identical properties in Swanage with an extended lease were worth £280,000. The average amount of ground rent was £55 collected quarterly. The lease elapsed on 7 May 2102. Considering the 77 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of fees.
In 2011 we were approached by Mr and Mrs. A Garcia who, having purchased a studio apartment in Swanage in November 2009. We are asked if we could approximate the price could be to extend the lease by a further 90 years. Comparative premises in Swanage with 100 year plus lease were in the region of £183,600. The mid-range amount of ground rent was £65 collected quarterly. The lease concluded in 2082. Given that there were 57 years unexpired we estimated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 not including professional charges.