Temple leases on residential properties are gradually losing value. if your lease has approximately 90 years remaining, you should start considering the need for a lease extension. If lease term is under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Temple will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to confirm your eligibility. In certain circumstances you may not be entitled. There are prescribed deadlines and steps to comply with once the process is triggered so it’s prudent to be guided by a conveyancing solicitor during the process.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Temple,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Temple valuers.
After lengthy negotiations with the freeholder of her purpose-built flat in Temple, Mollie initiated the lease extension process just as the lease was nearing the crucial 80-year deadline. The lease extension was concluded in September 2007. The landlord’s charges were restricted to about 450 pounds.
Last Spring we were contacted by Mr and Mrs. O Murphy , who moved into a studio flat in Temple in October 2010. The dilemma was if we could approximate the premium would likely be to prolong the lease by an additional years. Comparative residencies in Temple with an extended lease were valued around £300,000. The mid-range ground rent payable was £50 invoiced monthly. The lease expired in 2100. Given that there were 75 years left we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Temple residence is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case affected 1 flat. The number of years remaining on the existing lease(s) was 66.8 years.