Purley leases on residential properties are gradually losing value. if your lease has in the region of 90 years unexpired, you should start thinking about a lease extension. If lease term is less than 80 years, you will then have to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Purley will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to confirm if you qualify. In certain cases you may not be entitled. There are prescribed timetables and steps to follow once the process has started so it’s prudent to be guided by a conveyancer during the process.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Purley leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Hugo owned a 2 bedroom apartment in Purley on the market with a lease of just over fifty eight years remaining. Hugo on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Hugo to exercise his statutory right. Hugo procured expert advice and secured satisfactory resolution informally and ending up with a market value flat.
Ms I Reed completed a recently refurbished apartment in Purley in May 2009. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Comparative premises in Purley with 100 year plus lease were in the region of £265,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease concluded on 24 October 2100. Taking into account 74 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Purley residence is The Woodlands 95 Purley Park Road in April 2009. The Tribunals own valuation produced the figure of £37,912. This case was in relation to 6 flats. The unexpired lease term was 78.32 years.