With a residential leasehold premises in Preston Park, you are actually purchasing a right to live in a property for a set period of time. 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 should think about a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater notably once there are fewer than 80 years remaining. Anyone in Preston Park with a lease nearing 81 years unexpired should seriously consider extending it as soon as possible. Once a lease has under 80 years outstanding, under the current legislation the freeholder is entitled to calculate and demand a larger amount, based on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Preston Park with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Preston Park,the lease extension experts 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 Preston Park valuers.
Ethan was the the leasehold owner of a conversion flat in Preston Park being sold with a lease of just over 59 years remaining. Ethan informally contacted his landlord being a well known local-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 annually. No ground rent would be payable on a lease extension were Ethan to invoke his statutory right. Ethan obtained expert advice and secured satisfactory resolution informally and sell the flat.
Last Summer we were called by Mrs Ellen López , who completed a first floor flat in Preston Park in February 1995. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Identical properties in Preston Park with an extended lease were valued about £225,400. The average amount of ground rent was £45 billed every twelve months. The lease ended on 1 July 2089. Considering the 64 years left we calculated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 plus expenses.
In 2009 we were contacted by Dr Alexander Ramírez who, having took over the lease of a first floor apartment in Preston Park in July 2004. We are asked if we could approximate the price could be for a ninety year lease extension. Comparable premises in Preston Park with a long lease were in the region of £270,000. The average ground rent payable was £55 collected per annum. The lease lapsed on 27 May 2100. Taking into account 75 years left we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.