When it comes to residential leasehold premises in Verwood, you are actually purchasing an entitlement to live in a property for a set period of time. Modern 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 consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than eighty years left. Leasehold owners in Verwood with a lease approaching 81 years unexpired should seriously think of extending it sooner than later. Once the lease term has below 80 years outstanding, under the relevant Act the freeholder can calculate and levy a greater premium, assessed on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 Verwood,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 Verwood valuers.
Half a year ago Aiden, started to get close to the 80-year threshold with the lease on his first floor apartment in Verwood. Having bought his home 18 years ago, the length of the lease was of minimal importance. As luck would have it, he recognised he would imminently be paying an inflated amount for a lease extension. Aiden extended the lease just under the wire last September. Aiden and the landlord who owned the flat above ultimately agreed on an amount of £5,000 . If the lease had dropped lower than eighty years, the amount would have escalated by a minimum £875.
Last Summer we were e-mailed by Dr D García , who purchased a studio flat in Verwood in February 2007. We are asked if we could approximate the premium would likely be to extend the lease by 90 years. Similar properties in Verwood with 100 year plus lease were in the region of £245,000. The average ground rent payable was £45 collected every twelve months. The lease elapsed in 2093. Having 68 years left we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
In 2013 we were called by Mr and Mrs. H Martinez who, having took over the lease of a purpose-built apartment in Verwood in October 2009. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Comparative flats in Verwood with a long lease were in the region of £280,000. The average amount of ground rent was £55 invoiced per annum. The lease expired in 2103. Given that there were 78 years unexpired we estimated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including fees.