Baldock leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Baldock residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Baldock you must see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Baldock with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
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 experience and the close ties they enjoy with Baldock valuers.
During the course of the last few months Dylan, came perilously near to the 80-year mark with the lease on his first floor flat in Baldock. In buying his flat two decades ago, the lease term was of little bearing. As luck would have it, he recognised he would imminently be paying way over the odds for a lease extension. Dylan extended the lease just under the wire last May. Dylan and the freeholder ultimately settled on a premium of £5,500 . If he had missed the deadline, the price would have gone up by a minimum £975.
Ms M Ramírez moved into a basement apartment in Baldock in November 1996. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Comparative premises in Baldock with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 collected yearly. The lease expired on 2 February 2083. Given that there were 58 years outstanding we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus fees.
In 2014 we were e-mailed by Mr V Gunderson who, having owned a studio flat in Baldock in April 2011. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Similar properties in Baldock with 100 year plus lease were worth £205,000. The mid-range ground rent payable was £50 collected per annum. The lease ended in 2103. Considering the 78 years left we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of fees.