Unfortunately that a Frodsham residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Frodsham property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term dips below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of 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 The majority of flat owners in Frodsham will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Halifax | 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Frodsham leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Kyle, started to get near to the eighty-year mark with the lease on his one bedroom apartment in Frodsham. Having purchased his property two decades ago, the length of the lease was of little significance. As luck would have it, he noticed he needed to take steps soon on Extending the lease. Kyle was able to extend his lease at the eleventh hour last January. Kyle and the freeholder eventually settled on sum of £5,000 . If the lease had slid below eighty years, the premium would have escalated by at least £875.
Dr R Kelly took over the lease of a garden apartment in Frodsham in March 1997. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Similar residencies in Frodsham with 100 year plus lease were in the region of £216,000. The mid-range amount of ground rent was £60 collected per annum. The lease lapsed on 2 February 2083. Having 58 years unexpired we estimated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 plus costs.
Ms I Lefebvre owned a one bedroom flat in Frodsham in July 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by a further 90 years. Similar residencies in Frodsham with an extended lease were valued around £205,000. The mid-range ground rent payable was £50 billed annually. The lease ran out on 10 September 2103. Taking into account 78 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus fees.