It’s an underpublicised certainty that a The Meadows residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the The Meadows property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining drops below 80 years, you will end up paying 50% 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 Most leasehold owners in The Meadows will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the process.
Leasehold properties in The Meadows with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | |
| Godiva Mortgages | |
| Leeds Building Society | |
| Nationwide Building Society | |
| Virgin |
The lawyers that we work with undertake 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 conveyancer we work with provide it.
In recent months Arthur, came precariously close to the 80-year threshold with the lease on his basement flat in The Meadows. In buying his property two decades ago, the length of the lease was of little relevance. Fortunately, he recognised he needed to take action soon on Extending the lease. Arthur was able to extend his lease just ahead of time in April. Arthur and the landlord who owned the flat above eventually agreed on an amount of £5,500 . If the lease had descended below eighty years, the sum would have escalated by at least £900.
In 2011 we were approached by Mr and Mrs. W Bennett who, having completed a studio apartment in The Meadows in February 2007. The dilemma was if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Identical properties in The Meadows with 100 year plus lease were worth £233,200. The average amount of ground rent was £60 invoiced every twelve months. The lease ended in 2087. Taking into account 61 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £22,800 and £26,400 plus legals.
Mr S Mason bought a garden apartment in The Meadows in October 1997. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparative homes in The Meadows with 100 year plus lease were in the region of £171,800. The mid-range amount of ground rent was £55 collected monthly. The lease concluded on 17 May 2076. Given that there were 50 years outstanding we estimated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 exclusive of expenses.