When it comes to domestic leasehold property in Reading, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially when there are less than eighty years left. Residents in Reading with a lease approaching 81 years unexpired should seriously think of extending it sooner as opposed to later. When the lease term has under eighty years remaining, under the relevant Act the landlord can calculate and levy a larger amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold properties in Reading with over one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The lawyers that we work with handle Reading 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.
In recent months Liam, came dangerously close to the 80-year mark with the lease on his one bedroom flat in Reading. Having purchased his property two decades ago, the unexpired term was of no relevance. by good luck, he became aware that he needed to take steps soon on a lease extension. Liam was able to extend his lease just under the wire last July. Liam and the freeholder ultimately agreed on an amount of £5,000 . If he had missed the deadline, the price would have become more costly by at least £850.
Last July we were called by Mr Freddie Miller , who took over the lease of a studio flat in Reading in May 1999. The question was if we could estimate the premium could be for a ninety year extension to my lease. Comparable residencies in Reading with a long lease were worth £267,600. The average ground rent payable was £65 invoiced per annum. The lease elapsed on 25 September 2092. Given that there were 67 years unexpired we calculated the premium to the landlord for the lease extension to be between £14,300 and £16,400 not including legals.
In 2014 we were called by Mr and Mrs. O Gunderson who, having completed a one bedroom flat in Reading in May 2012. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Comparable residencies in Reading with a long lease were in the region of £201,200. The mid-range amount of ground rent was £55 billed every twelve months. The lease ran out in 2081. Considering the 56 years left we approximated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of professional charges.