With a long leasehold property in Acle, you effectively rent it for a certain period of time. These days flat leases typically tend to be 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 lease is the cost of extending the lease increases markedly notably when there are fewer than eighty years left. Anyone in Acle with a lease approaching 81 years left should seriously consider extending it sooner as opposed to later. Once a lease has below 80 years outstanding, under the current Act the landlord is entitled to calculate and charge a greater premium, based on a technical calculation, known as “marriage value” which is payable.
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you enhanced control over the value of your Acle leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Daniel, came dangerously near to the 80-year threshold with the lease on his one bedroom apartment in Acle. Having purchased his property two decades ago, the length of the lease was of little relevance. Luckily, he recognised he needed to take action soon on a lease extension. Daniel was able to extend his lease just in the nick of time in April. Daniel and the freeholder subsequently settled on a premium of £5,500 . If the lease had gone below eighty years, the figure would have become more costly by a minimum £1,150.
Last year we were e-mailed by Dr I Petit , who took over the lease of a one bedroom apartment in Acle in August 2003. The dilemma was if we could approximate the price could be to extend the lease by ninety years. Similar premises in Acle with a long lease were valued about £250,000. The mid-range amount of ground rent was £50 invoiced annually. The lease ended on 26 November 2094. Given that there were 69 years outstanding we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.
Dr Jamie Jones owned a ground floor apartment in Acle in January 2012. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Comparable homes in Acle with 100 year plus lease were in the region of £285,000. The average ground rent payable was £55 invoiced yearly. The lease ran out in 2104. Taking into account 79 years as a residual term we calculated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of costs.