Baldock leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Baldock tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Baldock you must see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Baldock with more than 100 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 premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| 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 are not acceptable. 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; |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Baldock,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Baldock valuers.
In 2014 Harrison, started to get close to the 80-year threshold with the lease on his two bedroom flat in Baldock. Having bought his flat two decades ago, the length of the lease was of minimal bearing. As luck would have it, he recognised he needed to take steps soon on a lease extension. Harrison was able to extend his lease just ahead of time last May. Harrison and the landlord in the end settled on sum of £6,000 . If he had missed the deadline, the figure would have become more exhorbitant by at least £1,025.
In 2011 we were e-mailed by Dr P Thomas who, having was assigned a lease of a recently refurbished apartment in Baldock in November 1996. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparable residencies in Baldock with 100 year plus lease were valued about £233,200. The average ground rent payable was £60 collected quarterly. The lease finished on 22 May 2087. Considering the 61 years unexpired we approximated the premium to the landlord for the lease extension to be within £22,800 and £26,400 plus legals.
Mrs Anna Brown purchased a studio flat in Baldock in March 1995. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparative properties in Baldock with an extended lease were valued about £171,800. The average amount of ground rent was £55 billed monthly. The lease end date was on 4 May 2076. Given that there were 50 years outstanding we approximated the premium to the freeholder for the lease extension to be within £33,300 and £38,400 not including professional charges.