It’s a harsh truth that a Lymm residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Lymm property market.Once your lease nears 85ish years, you need to start considering 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 falls lower than 80 years - otherwise a higher premium will be payable. Most leasehold owners in Lymm will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold residencies in Lymm with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Lymm 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.
Last year Ollie, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Lymm. Having bought his property two decades ago, the unexpired term was of minimal relevance. Thankfully, he recognised he would soon be paying an escalated premium for Extending the lease. Ollie arranged for a lease extension just under the wire in March. Ollie and the freeholder in the end settled on a premium of £6,000 . If he failed to meet the deadline, the figure would have gone up by a minimum £1,150.
In 2010 we were approached by Dr I Bailey who, having bought a basement apartment in Lymm in March 2002. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by a further 90 years. Comparative premises in Lymm with a long lease were in the region of £261,600. The mid-range ground rent payable was £60 invoiced yearly. The lease terminated on 28 January 2078. Considering the 52 years left we calculated the premium to the landlord for the lease extension to be within £39,000 and £45,000 not including professional charges.
Last Christmas we were contacted by Mr and Mrs. P Peterson , who bought a one bedroom apartment in Lymm in April 2003. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Identical homes in Lymm with an extended lease were valued about £218,000. The mid-range amount of ground rent was £45 collected quarterly. The lease ran out in 2089. Considering the 63 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £17,100 and £19,800 plus expenses.