Unfortunately that a Farnham Royal residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Farnham Royal property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term dips below eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Farnham Royal will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be worth the same as a freehold for many years ahead.
| 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 are not acceptable. 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Farnham Royal,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Farnham Royal valuers.
Evan owned a conversion apartment in Farnham Royal being marketed with a lease of a few days over sixty years remaining. Evan informally approached his landlord a well known local-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Evan to invoke his statutory right. Evan obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
In 2012 we were contacted by Mr S Thomas who, having owned a newly refurbished flat in Farnham Royal in May 2000. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Comparable properties in Farnham Royal with 100 year plus lease were worth £183,600. The mid-range ground rent payable was £65 billed every twelve months. The lease expired in 2083. Given that there were 57 years outstanding we estimated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of costs.
Last Winter we were approach by Mrs G Williams , who completed a garden apartment in Farnham Royal in May 1999. We are asked if we could estimate the premium could be to extend the lease by ninety years. Similar premises in Farnham Royal with 100 year plus lease were in the region of £250,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease ended in 2094. Given that there were 68 years left we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus legals.