Eaglescliffe leases on residential properties are gradually losing 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 Eaglescliffe tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Eaglescliffe you must investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold properties in Eaglescliffe with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Eaglescliffe,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Eaglescliffe valuers.
During the course of the last few months Dexter, started to get close to the eighty-year threshold with the lease on his garden flat in Eaglescliffe. In buying his property twenty years ago, the unexpired term was of minimal concern. Fortunately, he realised he would imminently be paying an escalated premium for Extending the lease. Dexter was able to extend his lease just ahead of time last March. Dexter and the freeholder eventually settled on a premium of £5,000 . If the lease had slipped below 80 years, the figure would have gone up by a minimum £1,150.
Last year we were approach by Mr and Mrs. K Cook , who was assigned a lease of a garden apartment in Eaglescliffe in February 2002. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Comparable homes in Eaglescliffe with 100 year plus lease were in the region of £220,400. The mid-range ground rent payable was £45 collected quarterly. The lease expired in 2088. Given that there were 64 years left we estimated the premium to the freeholder for the lease extension to be between £15,200 and £17,600 exclusive of fees.
Mr and Mrs. L Laurent took over the lease of a garden apartment in Eaglescliffe in July 2000. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar properties in Eaglescliffe with an extended lease were valued about £270,000. The mid-range ground rent payable was £55 collected quarterly. The lease concluded in 2099. Considering the 75 years left we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.