With a domestic leasehold premises in Aylesbury, you are actually purchasing an entitlement to live in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should 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 greater particularly once there are fewer than eighty years remaining. Leasehold owners in Aylesbury with a lease nearing 81 years unexpired should seriously consider extending it without delay. When a lease has below eighty years outstanding, under the relevant statute the freeholder is entitled to calculate and levy a larger premium, based on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Aylesbury 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.
Sam owned a studio apartment in Aylesbury being marketed with a lease of fraction over sixty years unexpired. Sam informally contacted his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were Sam to invoke his statutory right. Sam procured expert legal guidance and secured an acceptable deal informally and readily saleable.
Last Winter we were phoned by Dr Joshua Bertrand , who owned a purpose-built apartment in Aylesbury in April 2011. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar properties in Aylesbury with a long lease were in the region of £290,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease terminated on 22 August 2098. Given that there were 73 years left we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.
In 2011 we were contacted by Mr and Mrs. I Morgan who, having bought a garden flat in Aylesbury in January 1996. The dilemma was if we could approximate the price could be for a 90 year lease extension. Identical properties in Aylesbury with an extended lease were in the region of £240,600. The average amount of ground rent was £65 billed every twelve months. The lease finished on 25 March 2087. Having 62 years unexpired we estimated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 exclusive of expenses.