Lydney leases on residential properties are gradually losing value. Where your lease has about ninety years remaining, you should start considering the need for a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you start paying an additional element called marriage value. Flat owners in Lydney will usually qualify for a lease extension; however a solicitor should be able check if you qualify. In certain circumstances you may not qualify. There are also strict timetables and formalities to comply with once the process has started so it’s wise to be guided by a conveyancer during the process.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 conveyancing solicitors that we work with handle Lydney 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 unsuccessful discussions with the freeholder of her ground floor flat in Lydney, Morgan initiated the lease extension process as the 80 year deadline was swiftly advancing. The legal work was concluded in June 2007. The freeholder’s charges were negotiated to less than 600 pounds.
Last Summer we were called by Dr E James , who purchased a purpose-built apartment in Lydney in May 2002. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Similar properties in Lydney with an extended lease were worth £233,200. The mid-range ground rent payable was £60 collected monthly. The lease finished on 23 July 2086. Considering the 61 years as a residual term we approximated the premium to the landlord for the lease extension to be within £22,800 and £26,400 plus fees.
In 2012 we were contacted by Mr J Stewart who, having bought a studio flat in Lydney in October 2010. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparative properties in Lydney with 100 year plus lease were worth £166,800. The average ground rent payable was £50 collected every twelve months. The lease ended on 21 April 2075. Given that there were 50 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 plus fees.