Unfortunately that a Robertsbridge residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Robertsbridge property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining drops below eighty 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 The majority of leasehold owners in Robertsbridge will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally accepted that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with procure Robertsbridge 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 conveyancer we work with provide it.
Last year Michael, started to get close to the 80-year threshold with the lease on his basement flat in Robertsbridge. Having purchased his home two decades ago, the lease term was of minimal importance. Fortunately, he noticed he would soon be paying an escalated premium for a lease extension. Michael arranged for a lease extension just under the wire in June. Michael and the freeholder via the management company eventually agreed on an amount of £5,000 . If the lease had dipped to less than 80 years, the price would have gone up by a minimum £1,075.
Dr T Hernández acquired a one bedroom flat in Robertsbridge in February 2012. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar homes in Robertsbridge with 100 year plus lease were valued around £275,000. The average ground rent payable was £55 billed monthly. The lease ran out on 18 August 2103. Having 77 years left we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus costs.
Dr N Sánchez took over the lease of a one bedroom flat in Robertsbridge in April 1995. The question was if we could approximate the price could be for a ninety year extension to my lease. Identical premises in Robertsbridge with a long lease were worth £183,600. The average ground rent payable was £65 billed yearly. The lease finished in 2083. Given that there were 57 years as a residual term we calculated the premium to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of costs.