Yate leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Yate tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Yate you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you increased control over the value of your Yate leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months David, started to get close to the eighty-year mark with the lease on his basement apartment in Yate. Having bought his home two decades ago, the lease term was of no importance. As luck would have it, he realised he would soon be paying an escalated premium for Extending the lease. David was able to extend his lease just under the wire in September. David and the freeholder via the managing agents subsequently agreed on a premium of £5,000 . If the lease had descended to less than eighty years, the figure would have gone up by a minimum £975.
In 2011 we were e-mailed by Mrs N Clark who, having was assigned a lease of a basement flat in Yate in November 1999. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Identical premises in Yate with a long lease were in the region of £250,400. The average amount of ground rent was £65 invoiced yearly. The lease ended in 2090. Having 64 years unexpired we estimated the premium to the landlord to extend the lease to be within £19,000 and £22,000 not including professional charges.
Last Winter we were phoned by Mr and Mrs. W Hall , who moved into a purpose-built flat in Yate in April 2012. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Yate with an extended lease were worth £184,000. The mid-range ground rent payable was £55 billed yearly. The lease lapsed in 2079. Taking into account 53 years remaining we calculated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 plus legals.