Tunbridge Wells 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 becomes more expensive. Most owners of residential leasehold property in Tunbridge Wells enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Tunbridge Wells you should investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Tunbridge Wells with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 conveyancers that we work with handle Tunbridge Wells 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 lawyer we work with provide it.
In the wake of eight months of unsuccessful discussions with the freeholder of her one bedroom apartment in Tunbridge Wells, Melissa started the lease extension process as the 80 year threshold was quickly advancing. The lease extension was finalised in November 2006. The freeholder’s costs were restricted to slightly above 700 pounds.
In 2009 we were contacted by Mr B Carter who, having moved into a one bedroom apartment in Tunbridge Wells in April 2012. The dilemma was if we could approximate the premium would likely be to extend the lease by ninety years. Similar premises in Tunbridge Wells with an extended lease were in the region of £198,800. The mid-range ground rent payable was £55 collected monthly. The lease end date was on 1 February 2080. Having 55 years as a residual term we estimated the premium to the landlord for the lease extension to be between £33,300 and £38,400 not including legals.
Dr Ryan Bailey acquired a one bedroom apartment in Tunbridge Wells in May 2006. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparable homes in Tunbridge Wells with 100 year plus lease were valued about £300,000. The average amount of ground rent was £50 invoiced monthly. The lease expired on 12 November 2101. Given that there were 76 years left we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.