There is no doubt about it a leasehold property in Godmanchester is a wasting asset as a result of the diminishing lease term. Where the residual term has, more than 125 years remaining then this decrease may be of little impact however there will become a point in time when a lease has under than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main reason why you should extend the lease sooner than later. Many flat owners in Godmanchester will meet the qualifying criteria; that being said a lawyer can advise whether you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally considered that a property with in excess of 100 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 residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Godmanchester,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Godmanchester valuers.
After protracted discussions with the freeholder of her purpose-built flat in Godmanchester, Ellie commenced the lease extension process as the 80 year mark was fast advancing. The legal work was finalised in September 2012. The landlord’s charges were kept to an absolute minimum.
In 2011 we were approached by Dr Ali Williams who, having completed a garden apartment in Godmanchester in February 2001. The question was if we could approximate the price would likely be for a ninety year lease extension. Comparable residencies in Godmanchester with 100 year plus lease were in the region of £295,000. The average amount of ground rent was £45 billed monthly. The lease ran out on 28 February 2100. Taking into account 74 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including costs.
In 2011 we were called by Dr Phoebe Cox who, having completed a ground floor flat in Godmanchester in July 1996. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Comparable premises in Godmanchester with 100 year plus lease were in the region of £243,000. The average amount of ground rent was £65 billed monthly. The lease expired in 2089. Taking into account 63 years left we calculated the premium to the landlord to extend the lease to be between £20,000 and £23,000 not including fees.