It’s an underpublicised certainty that a Swinton residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Swinton property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining 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. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Swinton will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Engaging our service gives you enhanced control over the value of your Swinton leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
14 months ago Michael, came perilously near to the eighty-year mark with the lease on his leasehold flat in Swinton. Having bought his property 19 years ago, the length of the lease was of little bearing. Thankfully, he became aware that he needed to take action soon on a lease extension. Michael arranged for a lease extension at the eleventh hour last April. Michael and the landlord who owned the flat above ultimately agreed on an amount of £5,000 . If the lease had dipped to less than eighty years, the amount would have increased by a minimum £1,050.
Last year we were contacted by Mr Liam Peterson , who completed a purpose-built flat in Swinton in August 1996. We are asked if we could estimate the price would be for a ninety year lease extension. Identical residencies in Swinton with a long lease were worth £225,800. The average amount of ground rent was £60 collected quarterly. The lease concluded on 6 November 2085. Considering the 60 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £23,800 and £27,400 exclusive of expenses.
In 2010 we were approached by Mr John Ramírez who, having was assigned a lease of a recently refurbished flat in Swinton in July 1997. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Comparative residencies in Swinton with an extended lease were valued about £210,000. The average amount of ground rent was £50 invoiced per annum. The lease ended on 19 January 2105. Taking into account 80 years unexpired we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.