With a long leasehold premises in Pratt's Bottom, you are actually buying an entitlement to reside in a property for a set period of time. In recent years 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 should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately greater especially when there are fewer than eighty years left. Leasehold owners in Pratt's Bottom with a lease drawing near to 81 years remaining should seriously consider extending it without delay. Once the lease term has below 80 years left, under the relevant statute the freeholder is entitled to calculate and demand a larger amount, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold properties in Pratt's Bottom with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Birmingham Midshires | 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. |
| 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 landlord in Pratt's Bottom,the lease extension lawyers 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 Pratt's Bottom valuers.
Elijah owned a studio apartment in Pratt's Bottom being sold with a lease of a few days over 61 years left. Elijah informally spoke with his landlord a well known local-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Elijah to invoke his statutory right. Elijah procured expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
Last Spring we were phoned by Mr and Mrs. D King , who moved into a first floor flat in Pratt's Bottom in May 2011. We are asked if we could estimate the premium would be to extend the lease by ninety years. Similar homes in Pratt's Bottom with a long lease were in the region of £210,000. The mid-range ground rent payable was £50 billed annually. The lease elapsed in 2105. Having 80 years left we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of fees.
An example of a Lease Extension decision for a Pratt's Bottom residence 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 was in relation to 1 flat. The unexpired residue of the current lease was 50.57 years.