There is no doubt about it a leasehold property in Bourton on the Water is a wasting asset as a result of the shortening lease. If the lease has, over 99 years to run then this decrease may be of little impact nevertheless there will become a point in time when a lease has under than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should consider extending sooner as opposed to later. The majority of flat owners in Bourton on the Water will qualify for this right; nevertheless a conveyancer can advise if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
Lender | Requirement |
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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; |
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. |
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 |
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 conveyancing solicitors that we work with handle Bourton on the Water 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.
Last year Aaron, started to get close to the 80-year mark with the lease on his garden flat in Bourton on the Water. Having bought his home twenty years ago, the unexpired term was of minimal concern. Fortunately, he noticed he needed to take steps soon on Extending the lease. Aaron extended the lease at the eleventh hour in June. Aaron and the landlord subsequently agreed on a premium of £6,000 . If the lease had slipped to less than 80 years, the premium would have increased by at least £1,025.
Mrs R Brooks moved into a one bedroom apartment in Bourton on the Water in February 1995. We are asked if we could estimate the premium could be to prolong the lease by a further 90 years. Identical properties in Bourton on the Water with 100 year plus lease were valued about £225,400. The average amount of ground rent was £45 billed monthly. The lease expired in 2088. Having 64 years as a residual term we approximated the premium to the landlord for the lease extension to be within £16,200 and £18,600 not including costs.
Mr and Mrs. S Wilson took over the lease of a garden flat in Bourton on the Water in November 1995. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical premises in Bourton on the Water with a long lease were in the region of £270,000. The mid-range amount of ground rent was £55 invoiced quarterly. The lease expired on 13 August 2099. Given that there were 75 years remaining we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.