With a domestic leasehold property in Farnham Common, you are actually purchasing an entitlement to reside in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are less than eighty years left. Residents in Farnham Common with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once a lease has below eighty years outstanding, under the relevant legislation the landlord is entitled to calculate and charge a greater amount, assessed on a technical computation, known as “marriage value” which is payable.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| 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 Farnham Common 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.
After lengthy discussions with the landlord of her leasehold flat in Farnham Common, Katherine commenced the lease extension process as the eighty year deadline was swiftly coming. The lease extension was finalised in October 2013. The freeholder’s charges were negotiated to about 600 pounds.
Last Winter we were contacted by Dr A Reed , who owned a newly refurbished apartment in Farnham Common in January 2012. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Comparative homes in Farnham Common with a long lease were worth £264,000. The average amount of ground rent was £60 invoiced annually. The lease came to a finish in 2077. Given that there were 53 years unexpired we approximated the premium to the freeholder for the lease extension to be within £37,100 and £42,800 exclusive of costs.
In 2013 we were contacted by Dr C Harris who, having was assigned a lease of a one bedroom flat in Farnham Common in January 2005. The question was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Identical homes in Farnham Common with an extended lease were in the region of £220,400. The mid-range amount of ground rent was £45 collected monthly. The lease elapsed on 17 October 2088. Taking into account 64 years left we estimated the premium to the landlord to extend the lease to be between £16,200 and £18,600 not including professional charges.