With a residential leasehold property in Aldersgate, you are in fact renting it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly when there are fewer than 80 years remaining. Anyone in Aldersgate with a lease drawing near to 81 years left should seriously consider extending it without delay. Once a lease has under eighty years outstanding, under the relevant Act the freeholder can calculate and levy a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold properties in Aldersgate with in excess of one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Aldersgate leasehold, as your property will be more valuable and saleable in relation to the 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.
Last Winter Zachary, started to get near to the eighty-year mark with the lease on his ground floor apartment in Aldersgate. Having bought his flat twenty years previously, the unexpired term was of minimal relevance. Fortunately, he noticed he would soon be paying an escalated premium for Extending the lease. Zachary was able to extend his lease just under the wire last January. Zachary and the freeholder via the management company in the end agreed on the final figure of £5,500 . If he had missed the deadline, the premium would have increased by at least £850.
In 2011 we were approached by Mr and Mrs. F Martin who, having bought a studio apartment in Aldersgate in November 2002. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Similar premises in Aldersgate with 100 year plus lease were valued around £191,000. The mid-range amount of ground rent was £65 collected yearly. The lease finished in 2083. Taking into account 58 years outstanding we approximated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 not including professional charges.
An example of a Lease Extension matter before the tribunal for a Aldersgate residence is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case related to 2 flats. The unexpired term as at the valuation date was 72.39 years.