With a residential leasehold property in Aldermanbury, you effectively rent it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are less than eighty years left. Leasehold owners in Aldermanbury with a lease nearing 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has below eighty years remaining, under the relevant statute the freeholder is entitled to calculate and charge a larger premium, based on a technical calculation, known as “marriage value” which is payable.
Leasehold properties in Aldermanbury with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Aldermanbury 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.
Joshua owned a 2 bedroom flat in Aldermanbury on the market with a lease of just over fifty eight years remaining. Joshua on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Joshua to exercise his statutory right. Joshua obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Last Summer we were e-mailed by Dr Aaron Reed , who bought a purpose-built apartment in Aldermanbury in February 1997. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Identical properties in Aldermanbury with an extended lease were valued about £290,000. The mid-range ground rent payable was £45 billed per annum. The lease finished on 16 August 2098. Given that there were 73 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including costs.
An example of a Lease Extension matter before the tribunal for a Aldermanbury residence is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case was in relation to 2 flats. The remaining number of years on the lease was 72.39 years.