Turvey 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 Turvey tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Turvey you really ought to investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Turvey with more than 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 property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancers that we work with handle Turvey 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 conveyancing solicitor we work with provide it.
Two years ago Ethan, came precariously close to the 80-year mark with the lease on his studio flat in Turvey. Having purchased his property 18 years ago, the length of the lease was of little importance. Thankfully, he realised he would soon be paying an inflated amount for Extending the lease. Ethan extended the lease just under the wire last June. Ethan and the landlord ultimately settled on an amount of £6,000 . If he not met the deadline, the premium would have increased by a minimum £1,025.
Last Christmas we were e-mailed by Dr Ibrahim Gunderson , who acquired a studio apartment in Turvey in April 2002. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Identical residencies in Turvey with 100 year plus lease were in the region of £265,000. The average amount of ground rent was £50 collected every twelve months. The lease finished in 2098. Given that there were 73 years unexpired we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus professional charges.
In 2010 we were e-mailed by Mr A Bonnet who, having bought a one bedroom flat in Turvey in May 2002. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Identical flats in Turvey with 100 year plus lease were valued about £264,000. The mid-range amount of ground rent was £60 billed monthly. The lease elapsed in 2078. Having 53 years left we calculated the premium to the landlord for the lease extension to be within £37,100 and £42,800 not including costs.