Yate leases on domestic properties are gradually losing value. Where your lease has about ninety years unexpired, you should start thinking about a lease extension. If lease term is under eighty years, you will then have to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Yate will mostly qualify for a lease extension; however it’s a good idea to check with a conveyancer to confirm your eligibility. In some circumstances you may not be entitled. There are also strict deadlines and procedures to follow once the process is triggered so it’s sensible to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| Yorkshire 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. |
Retaining our service gives you better control over the value of your Yate leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Aiden was the the leasehold proprietor of a conversion apartment in Yate being marketed with a lease of just over 59 years unexpired. Aiden informally approached his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Aiden to invoke his statutory right. Aiden obtained expert advice and secured satisfactory resolution informally and readily saleable.
In 2012 we were phoned by Mr and Mrs. G Martinez who, having moved into a ground floor flat in Yate in August 1995. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable residencies in Yate with an extended lease were worth £285,000. The average amount of ground rent was £45 invoiced monthly. The lease expired in 2098. Considering the 72 years as a residual term we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of costs.
Mr and Mrs. P Kelly moved into a recently refurbished flat in Yate in March 2004. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable residencies in Yate with a long lease were in the region of £233,200. The mid-range ground rent payable was £60 billed annually. The lease finished on 23 January 2087. Having 61 years as a residual term we calculated the premium to the landlord to extend the lease to be between £22,800 and £26,400 exclusive of expenses.