The closer a domestic lease in The Ridgeway nears to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, in excess of one hundred years to run then this decrease may be fractional however there will become a stage when a lease has less than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner rather than later. Most flat owners in The Ridgeway will meet the qualifying criteria; that being said a lawyer can confirm whether you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold properties in The Ridgeway with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you better control over the value of your The Ridgeway leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
14 months ago John, came critically near to the eighty-year threshold with the lease on his two bedroom flat in The Ridgeway. Having purchased his flat two decades ago, the unexpired term was of no relevance. Fortunately, he became aware that he needed to take action soon on Extending the lease. John extended the lease just in the nick of time last June. John and the landlord subsequently settled on sum of £5,000 . If the lease had descended to less than eighty years, the price would have increased by a minimum £1,000.
In 2012 we were contacted by Mrs H Richardson who, having took over the lease of a one bedroom apartment in The Ridgeway in March 2008. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Similar properties in The Ridgeway with a long lease were in the region of £225,400. The average amount of ground rent was £45 billed per annum. The lease lapsed in 2090. Considering the 64 years left we approximated the premium to the freeholder for the lease extension to be between £15,200 and £17,600 plus professional charges.
An example of a Lease Extension matter before the tribunal for a The Ridgeway flat is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case affected 13 flats. The remaining number of years on the lease was 76 years.