With a residential leasehold premises in Colchester, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than 80 years left. Anyone in Colchester with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once a lease has fewer than 80 years remaining, under the relevant Act the landlord can calculate and demand a greater amount, based on a technical calculation, known as “marriage value” which is due.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Colchester,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Colchester valuers.
Last October Oscar, started to get near to the eighty-year mark with the lease on his first floor flat in Colchester. In buying his flat twenty years previously, the length of the lease was of little concern. As luck would have it, he noticed he needed to take steps soon on a lease extension. Oscar was able to extend his lease just under the wire last January. Oscar and the landlord eventually settled on sum of £6,000 . If he failed to meet the deadline, the sum would have become more costly by at least £925.
Ms Zoe Williams owned a one bedroom apartment in Colchester in July 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by an additional years. Comparative residencies in Colchester with 100 year plus lease were worth £200,800. The average ground rent payable was £65 billed monthly. The lease finished in 2084. Taking into account 60 years remaining we calculated the premium to the landlord to extend the lease to be within £20,900 and £24,200 not including fees.
Mr and Mrs. H Richardson bought a recently refurbished apartment in Colchester in May 2010. We are asked if we could estimate the premium would be to prolong the lease by an additional years. Comparable premises in Colchester with 100 year plus lease were valued around £260,000. The average ground rent payable was £50 billed yearly. The lease ran out in 2095. Having 71 years unexpired we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.