The rule of thumb is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Farnham Royal can extend the lease for a further 90 years under Leasehold Reform legislation. Please give careful consideration before delaying your Farnham Royal lease extension. Putting off that expense today simply increases the premium you will eventually be required to pay to extend the lease.
Leasehold properties in Farnham Royal 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 premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Engaging our service will provide you enhanced control over the value of your Farnham Royal leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Max, started to get near to the eighty-year mark with the lease on his first floor apartment in Farnham Royal. In buying his flat two decades ago, the lease term was of no importance. Fortunately, he realised he needed to take steps soon on Extending the lease. Max extended the lease at the eleventh hour last January. Max and the freeholder via the managing agents in the end agreed on an amount of £5,500 . If the lease had slipped to less than eighty years, the price would have become more costly by a minimum £925.
Mrs E Pérez was assigned a lease of a one bedroom flat in Farnham Royal in May 2009. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Identical premises in Farnham Royal with a long lease were worth £235,200. The average ground rent payable was £45 billed annually. The lease concluded in 2091. Given that there were 66 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including professional charges.
Mr and Mrs. C Stewart took over the lease of a purpose-built apartment in Farnham Royal in January 1998. The dilemma was if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Similar properties in Farnham Royal with a long lease were in the region of £280,000. The mid-range ground rent payable was £55 collected monthly. The lease finished in 2102. Given that there were 77 years remaining we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus expenses.