Lymm 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 becomes more expensive. Legislation has been in place for sometime now allowing qualifying Lymm residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Lymm you should check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Lymm with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
The lawyers that we work with handle 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.
During the course of the last few months William, started to get close to the eighty-year mark with the lease on his ground floor flat in Lymm. In buying his home twenty years previously, the lease term was of little interest. Fortunately, he realised he needed to take steps soon on Extending the lease. William extended the lease just under the wire last August. William and the landlord who owned the flat above ultimately agreed on sum of £5,000 . If he failed to meet the deadline, the amount would have escalated by at least £900.
Mr and Mrs. P Simon owned a first floor apartment in Lymm in November 2002. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by 90 years. Similar premises in Lymm with a long lease were valued about £254,200. The average ground rent payable was £60 billed yearly. The lease lapsed in 2077. Taking into account 51 years unexpired we estimated the premium to the landlord for the lease extension to be between £43,700 and £50,600 plus expenses.
In 2012 we were approached by Dr Charlie Peterson who, having purchased a ground floor apartment in Lymm in November 1996. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Comparative homes in Lymm with an extended lease were valued around £210,600. The average ground rent payable was £45 collected monthly. The lease ended in 2088. Taking into account 62 years as a residual term we calculated the premium to the landlord to extend the lease to be between £18,100 and £20,800 plus professional charges.