It’s a harsh certainty that a March residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the March property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If lease term drops under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to 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 Most flat owners in March will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold residencies in March with in excess of one hundred years left 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 home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in March can be a difficult process. We recommend you procure professional help from a lawyer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring March lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Aarav, started to get near to the eighty-year threshold with the lease on his ground floor flat in March. In buying his flat 19 years previously, the unexpired term was of no interest. Luckily, he became aware that he would imminently be paying an inflated amount for a lease extension. Aarav was able to extend his lease at the eleventh hour in August. Aarav and the freeholder via the managing agents eventually settled on sum of £5,500 . If he not met the deadline, the sum would have become more costly by a minimum £925.
Mr D Roberts acquired a basement apartment in March in June 2007. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative flats in March with 100 year plus lease were valued about £275,000. The average ground rent payable was £45 collected monthly. The lease came to a finish on 9 March 2094. Given that there were 69 years outstanding we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus legals.
In 2013 we were called by Mr and Mrs. G Anderson who, having was assigned a lease of a purpose-built flat in March in September 2002. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Comparable residencies in March with a long lease were in the region of £216,000. The mid-range amount of ground rent was £60 invoiced annually. The lease elapsed on 16 September 2083. Having 58 years remaining we estimated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 not including fees.