When it comes to long leasehold premises in Farnham Royal, you are actually purchasing an entitlement to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are fewer than eighty years remaining. Anyone in Farnham Royal with a lease drawing near to 81 years left should seriously think of extending it sooner than later. When a lease has less than eighty years outstanding, under the relevant statute the freeholder can calculate and demand a larger premium, based on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold premises in Farnham Royal with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Farnham Royal leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy negotiations with the landlord of her basement apartment in Farnham Royal, Erin commenced the lease extension process just as her lease was approaching the crucial eighty-year deadline. The transaction was concluded in August 2005. The freeholder’s fees were negotiated to under five hundred pounds.
Last October we were approach by Mr and Mrs. A Parker , who moved into a one bedroom flat in Farnham Royal in May 2000. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparable residencies in Farnham Royal with a long lease were worth £255,000. The average amount of ground rent was £50 collected monthly. The lease ended in 2095. Taking into account 70 years remaining we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
Mrs Shannon Bennett completed a recently refurbished flat in Farnham Royal in August 2004. The dilemma was if we could estimate the premium could be to prolong the lease by a further 90 years. Comparative flats in Farnham Royal with a long lease were valued about £246,800. The average ground rent payable was £60 invoiced per annum. The lease lapsed in 2075. Considering the 50 years outstanding we approximated the premium to the freeholder to extend the lease to be within £44,700 and £51,600 not including costs.