With a residential leasehold premises in Halstead, you are actually buying a right to reside in a property for a prescribed time frame. These days 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 may think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly especially when there are less than eighty years remaining. Residents in Halstead with a lease drawing near to 81 years unexpired should seriously think of extending it as soon as possible. When a lease has less than eighty years remaining, under the relevant Act the landlord is entitled to calculate and levy a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
It is generally considered that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you enhanced control over the value of your Halstead leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ryan owned a high value flat in Halstead on the market with a lease of a few days over 61 years remaining. Ryan on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ryan to exercise his statutory right. Ryan obtained expert advice and was able to make an informed judgement and deal with the matter and sell the property.
Last Christmas we were phoned by Mr and Mrs. H Baker , who owned a one bedroom flat in Halstead in November 2007. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical homes in Halstead with a long lease were worth £193,400. The average amount of ground rent was £65 billed quarterly. The lease elapsed on 13 May 2084. Given that there were 59 years remaining we approximated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 not including legals.
In 2009 we were approached by Dr S Bennett who, having bought a one bedroom apartment in Halstead in April 2005. The question was if we could shed any light on how much (roughly) price could be to prolong the lease by an additional years. Identical flats in Halstead with a long lease were in the region of £255,000. The mid-range amount of ground rent was £50 collected per annum. The lease expiry date was in 2095. Having 70 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £10,500 and £12,000 not including legals.