Unfortunately that a Wide Open 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 Wide Open property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Wide Open will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold properties in Wide Open with in excess of 100 years outstanding 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 upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | |
| Coventry Building Society | |
| National Westminster Bank | |
| Nationwide Building Society | |
| Virgin |
The conveyancing solicitors that we work with handle Wide Open 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.
Harrison was the the leasehold proprietor of a high value flat in Wide Open on the market with a lease of a little over 61 years outstanding. Harrison on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Harrison to invoke his statutory right. Harrison procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Mr Ethan Clarke moved into a recently refurbished apartment in Wide Open in February 1995. The question was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Identical homes in Wide Open with 100 year plus lease were valued about £260,000. The average ground rent payable was £50 collected every twelve months. The lease terminated in 2097. Having 71 years remaining we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus legals.
Ms Leah Michel acquired a garden flat in Wide Open in November 2002. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Similar homes in Wide Open with an extended lease were valued around £254,200. The average amount of ground rent was £60 collected annually. The lease ran out in 2077. Taking into account 51 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £43,700 and £50,600 plus costs.