It’s an underpublicised truth that a Totterdown 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 first few years due to the loss of value being disguised by increases in the Totterdown property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining slips below 80 years, you will then be required to pay 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 Most flat owners in Totterdown will be able to extend under the legislation; however a conveyancer will 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 follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold residencies in Totterdown with more than one hundred years outstanding on the lease are often 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 buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure Totterdown 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.
In 2014 Noah, started to get near to the 80-year threshold with the lease on his leasehold flat in Totterdown. In buying his flat twenty years ago, the length of the lease was of little interest. Luckily, he noticed he would imminently be paying an inflated amount for a lease extension. Noah extended the lease just under the wire last May. Noah and the landlord eventually settled on the final figure of £5,500 . If the lease had fallen below 80 years, the amount would have escalated by a minimum £1,150.
Last Spring we were called by Mr and Mrs. S Ward , who moved into a basement apartment in Totterdown in March 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Similar premises in Totterdown with an extended lease were in the region of £225,400. The mid-range ground rent payable was £45 collected every twelve months. The lease ended in 2089. Having 64 years left we estimated the premium to the freeholder to extend the lease to be within £15,200 and £17,600 exclusive of professional charges.
In 2011 we were e-mailed by Ms F Walker who, having was assigned a lease of a one bedroom flat in Totterdown in October 1995. The question was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Identical residencies in Totterdown with 100 year plus lease were in the region of £270,000. The average amount of ground rent was £55 collected quarterly. The lease ended on 6 April 2100. Taking into account 75 years remaining we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.