With a domestic leasehold premises in Pratt's Bottom, you are actually purchasing a right to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly once there are less than 80 years left. Residents in Pratt's Bottom with a lease drawing near to 81 years unexpired should seriously consider extending it sooner as opposed to later. Once the lease term has under eighty years remaining, under the current statute the freeholder can calculate and levy a larger premium, based on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold properties in Pratt's Bottom with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Pratt's Bottom lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Half a year ago Kyle, came dangerously near to the eighty-year mark with the lease on his basement apartment in Pratt's Bottom. In buying his home twenty years previously, the lease term was of minimal significance. by good luck, he realised he would soon be paying way over the odds for Extending the lease. Kyle extended the lease at the eleventh hour last May. Kyle and the landlord who owned the flat above eventually settled on the final figure of £5,500 . If he failed to meet the deadline, the figure would have escalated by at least £1,100.
Mr S Anderson owned a basement apartment in Pratt's Bottom in July 1997. The question was if we could shed any light on how much (approximately) premium could be to prolong the lease by a further 90 years. Comparative properties in Pratt's Bottom with 100 year plus lease were in the region of £174,200. The average amount of ground rent was £55 collected annually. The lease expired on 18 July 2076. Having 51 years unexpired we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 not including legals.
An example of a Lease Extension matter before the tribunal for a Pratt's Bottom premises is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case affected 1 flat. The unexpired term as at the valuation date was 50.57 years.