Grasmere 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 gets more expensive. It is the case that most Grasmere 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 Grasmere you should check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Grasmere with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 |
| 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. |
The lawyers that we work with handle Grasmere lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Subsequent to protracted negotiations with the landlord of her two bedroom flat in Grasmere, Shannon started the lease extension process just as her lease was coming close to the all-important 80-year threshold. The transaction was concluded in March 2006. The freeholder’s fees were kept to an absolute minimum.
In 2014 we were contacted by Mrs Chelsea Campbell who, having completed a one bedroom apartment in Grasmere in August 1996. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparative homes in Grasmere with 100 year plus lease were valued about £216,000. The mid-range amount of ground rent was £60 invoiced per annum. The lease finished in 2083. Given that there were 58 years unexpired we estimated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 exclusive of costs.
Last Autumn we were e-mailed by Mr and Mrs. T François , who acquired a first floor apartment in Grasmere in July 2011. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by ninety years. Similar properties in Grasmere with an extended lease were worth £205,000. The average amount of ground rent was £50 collected yearly. The lease expiry date was on 23 February 2103. Taking into account 78 years remaining we approximated the compensation to the freeholder to extend the lease to be between £7,600 and £8,800 exclusive of legals.