Farnham Royal leases on residential properties are gradually losing value. Where your lease has about 90 years unexpired, you should start thinking about a lease extension. If lease term is under 80 years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Farnham Royal will usually qualify for a lease extension; however It would be wise to check with a conveyancer to confirm your eligibility. In some situations you may not qualify. There are also strict timetables and procedures to comply with once the process has started so it’s wise to be guided by a conveyancer during the process.
Leasehold premises in Farnham Royal with over 100 years outstanding 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 property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Farnham Royal can be a difficult process. We recommend you secure professional help from a conveyancer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Farnham Royal lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Jonathan, started to get near to the 80-year mark with the lease on his garden apartment in Farnham Royal. In buying his flat 18 years previously, the length of the lease was of minimal significance. by good luck, he recognised he needed to take steps soon on Extending the lease. Jonathan arranged for a lease extension at the eleventh hour last August. Jonathan and the freeholder via the management company in the end settled on an amount of £5,000 . If the lease had slid to less than eighty years, the figure would have become more exhorbitant by at least £1,125.
In 2013 we were phoned by Mrs Jordan Cooper who, having completed a studio flat in Farnham Royal in September 2001. 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 flats in Farnham Royal with an extended lease were valued around £280,000. The mid-range amount of ground rent was £55 collected monthly. The lease came to a finish on 5 July 2103. Having 78 years as a residual term we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 plus professional charges.
In 2014 we were called by Mrs G Torres who, having completed a first floor apartment in Farnham Royal in October 1996. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Identical properties in Farnham Royal with 100 year plus lease were in the region of £191,000. The average amount of ground rent was £65 billed every twelve months. The lease concluded on 1 July 2083. Taking into account 58 years left we estimated the premium to the landlord for the lease extension to be between £23,800 and £27,400 plus professional charges.