Silsoe leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Silsoe tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Silsoe you must investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Silsoe with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value 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 service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you increased control over the value of your Silsoe leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 William, started to get close to the eighty-year mark with the lease on his garden flat in Silsoe. In buying his property twenty years ago, the length of the lease was of minimal concern. Luckily, he became aware that he would imminently be paying an inflated amount for Extending the lease. William was able to extend his lease at the eleventh hour in June. William and the landlord who owned the flat above eventually settled on a premium of £6,000 . If the lease had fallen below eighty years, the amount would have gone up by a minimum £1,150.
In 2009 we were contacted by Mr Harvey Pérez who, having took over the lease of a first floor flat in Silsoe in May 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Comparable properties in Silsoe with a long lease were valued about £225,800. The average ground rent payable was £60 billed monthly. The lease elapsed on 24 May 2085. Taking into account 60 years as a residual term we approximated the premium to the landlord to extend the lease to be between £23,800 and £27,400 plus professional charges.
Last Christmas we were e-mailed by Mr and Mrs. I Bonnet , who completed a purpose-built apartment in Silsoe in January 2004. We are asked if we could estimate the price would be for a ninety year extension to my lease. Identical properties in Silsoe with a long lease were in the region of £210,000. The average amount of ground rent was £50 invoiced annually. The lease expiry date was on 28 October 2105. Given that there were 80 years outstanding we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of expenses.