The Meadows leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in The Meadows enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in The Meadows you really ought to investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle The Meadows 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.
Last October Jason, came perilously close to the 80-year mark with the lease on his purpose- built apartment in The Meadows. In buying his home two decades ago, the length of the lease was of no interest. As luck would have it, he became aware that he would imminently be paying way over the odds for a lease extension. Jason arranged for a lease extension at the eleventh hour in September. Jason and the landlord who owned the flat above in the end agreed on an amount of £5,500 . If the lease had gone lower than eighty years, the figure would have gone up by a minimum £1,000.
In 2013 we were contacted by Mr and Mrs. D Fournier who, having owned a recently refurbished apartment in The Meadows in August 1996. The dilemma was if we could shed any light on how much (roughly) price would likely be to prolong the lease by an additional years. Similar homes in The Meadows with 100 year plus lease were valued around £174,200. The average ground rent payable was £55 billed per annum. The lease elapsed on 27 February 2076. Considering the 51 years remaining we approximated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 plus professional charges.
Last November we were called by Mr Jason Morel , who took over the lease of a basement flat in The Meadows in May 2010. We are asked if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Identical residencies in The Meadows with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 billed monthly. The lease concluded in 2096. Considering the 71 years unexpired we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus fees.