It’s a harsh truth that a Upper Tean residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Upper Tean property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining dips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Upper Tean will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold residencies in Upper Tean with more than 100 years left 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 circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Upper Tean 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.
Harry owned a conversion apartment in Upper Tean being marketed with a lease of just over fifty eight years remaining. Harry on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Harry to invoke his statutory right. Harry procured expert legal guidance and was able to make an informed decision and handle with the matter and sell the flat.
Last month we were approach by Mr and Mrs. U Turner , who bought a newly refurbished apartment in Upper Tean in June 2003. The dilemma was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by 90 years. Similar properties in Upper Tean with 100 year plus lease were in the region of £240,600. The average amount of ground rent was £65 collected monthly. The lease termination date was on 17 April 2087. Given that there were 62 years remaining we calculated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of fees.
Last Christmas we were contacted by Mrs Abbie Collins , who completed a one bedroom flat in Upper Tean in March 1997. The question was if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Similar flats in Upper Tean with an extended lease were worth £179,200. The mid-range amount of ground rent was £55 billed yearly. The lease expired in 2076. Taking into account 51 years left we estimated the premium to the landlord to extend the lease to be within £31,400 and £36,200 plus professional charges.