It’s a harsh certainty that a Killamarsh residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Killamarsh property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops under eighty years, you will end up paying half 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 leasehold owners in Killamarsh will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold residencies in Killamarsh with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Retaining our service will provide you better control over the value of your Killamarsh leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Reuben, came dangerously near to the 80-year mark with the lease on his two bedroom apartment in Killamarsh. In buying his home two decades ago, the unexpired term was of no significance. As luck would have it, it dawned on him that he would imminently be paying an inflated amount for Extending the lease. Reuben extended the lease just in the nick of time in August. Reuben and the freeholder ultimately settled on an amount of £5,500 . If he had missed the deadline, the premium would have escalated by a minimum £1,025.
Mr Riley Ali moved into a garden flat in Killamarsh in June 1998. We are asked if we could estimate the price would be for a ninety year lease extension. Similar flats in Killamarsh with a long lease were in the region of £210,000. The mid-range amount of ground rent was £50 invoiced annually. The lease finished in 2104. Taking into account 80 years unexpired we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.
Dr Daniel Bonnet took over the lease of a recently refurbished flat in Killamarsh in July 2008. We are asked if we could approximate the price would be to extend the lease by an additional years. Identical homes in Killamarsh with a long lease were worth £275,000. The mid-range ground rent payable was £45 invoiced per annum. The lease expiry date was in 2093. Considering the 69 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including fees.