Unfortunately that a Prescot residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Prescot property market.Once your lease nears 85ish years, you should 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 dips under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Prescot will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Prescot with over 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
Using our service will provide you enhanced control over the value of your Prescot leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last year Aarav, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Prescot. Having purchased his property two decades ago, the unexpired term was of little relevance. Thankfully, he realised he would imminently be paying an inflated amount for Extending the lease. Aarav was able to extend his lease at the eleventh hour in September. Aarav and the freeholder via the management company subsequently agreed on sum of £5,500 . If he not met the deadline, the price would have gone up by at least £900.
In 2013 we were called by Mr and Mrs. K Moreau who, having owned a studio flat in Prescot in September 2011. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Comparable homes in Prescot with a long lease were worth £184,000. The average ground rent payable was £55 collected every twelve months. The lease finished on 7 November 2079. Considering the 53 years unexpired we calculated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 plus fees.
Mrs A Bertrand was assigned a lease of a ground floor apartment in Prescot in March 2004. The question was if we could approximate the price could be for a ninety year extension to my lease. Similar residencies in Prescot with 100 year plus lease were worth £290,000. The mid-range ground rent payable was £45 invoiced monthly. The lease expired in 2099. Given that there were 73 years remaining we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of legals.