With a residential leasehold premises in Walton on the Naze, you are in fact renting it for a certain amount 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 think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly once there are fewer than eighty years left. Anyone in Walton on the Naze with a lease drawing near to 81 years remaining should seriously consider extending it sooner rather than later. Once the lease term has under eighty years remaining, under the current Act the freeholder is entitled to calculate and levy a greater premium, assessed on a technical multiplication, known as “marriage value” which is due.
Leasehold residencies in Walton on the Naze with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Engaging our service gives you increased control over the value of your Walton on the Naze leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy discussions with the landlord of her leasehold flat in Walton on the Naze, Rhiannon commenced the lease extension process just as the lease was approaching the critical 80-year mark. The transaction completed in April 2011. The landlord’s charges were restricted to under 500 GBP.
In 2011 we were phoned by Ms Emily Díaz who, having bought a one bedroom apartment in Walton on the Naze in August 2005. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by an additional years. Similar flats in Walton on the Naze with 100 year plus lease were in the region of £205,000. The average ground rent payable was £50 billed yearly. The lease concluded in 2105. Taking into account 79 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of legals.
In 2009 we were phoned by Ms Sian Johnson who, having acquired a studio flat in Walton on the Naze in June 1998. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by a further 90 years. Identical residencies in Walton on the Naze with an extended lease were worth £275,000. The average ground rent payable was £65 collected every twelve months. The lease termination date was on 6 October 2094. Taking into account 68 years unexpired we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus professional charges.