It’s a harsh truth that a Lake District residential lease is a wasting 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 depreciation being disguised by increases in the Lake District property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be payable. Most leasehold owners in Lake District will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally accepted that a property with over 100 years unexpired lease term 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 decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Lake District,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 experience and the close ties they enjoy with Lake District valuers.
Kyle owned a studio apartment in Lake District on the market with a lease of a few days over 72 years left. Kyle informally approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Kyle to invoke his statutory right. Kyle procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
Mr and Mrs. L Adams bought a purpose-built flat in Lake District in August 1997. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical premises in Lake District with an extended lease were worth £275,000. The mid-range ground rent payable was £45 billed every twelve months. The lease came to a finish on 12 July 2093. Considering the 69 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus professional charges.
Last Spring we were approach by Dr Archie Clark , who acquired a ground floor apartment in Lake District in April 1999. The question was if we could approximate the price would be for a ninety year lease extension. Comparative premises in Lake District with an extended lease were valued about £216,000. The mid-range ground rent payable was £60 collected per annum. The lease terminated in 2082. Taking into account 58 years outstanding we approximated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of professional charges.