With a domestic leasehold premises in Barnard Castle, you effectively rent it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Residents in Barnard Castle with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once a lease has less than eighty years outstanding, under the relevant legislation the freeholder is entitled to calculate and levy a larger premium, based on a technical computation, known as “marriage value” which is payable.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Using our service gives you increased control over the value of your Barnard Castle leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Joseph, started to get near to the 80-year threshold with the lease on his ground floor flat in Barnard Castle. Having purchased his property 19 years previously, the unexpired term was of no relevance. Thankfully, he realised he needed to take action soon on Extending the lease. Joseph arranged for a lease extension just under the wire last August. Joseph and the landlord who owned the flat above subsequently settled on the final figure of £5,000 . If the lease had slipped below eighty years, the sum would have gone up by a minimum £975.
Last Winter we were e-mailed by Mr and Mrs. N Fournier , who moved into a one bedroom flat in Barnard Castle in January 1995. We are asked if we could approximate the premium would likely be to extend the lease by ninety years. Identical premises in Barnard Castle with 100 year plus lease were in the region of £261,600. The average amount of ground rent was £60 billed every twelve months. The lease came to a finish in 2078. Given that there were 52 years left we approximated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 not including fees.
Last year we were approach by Mr C Edwards , who purchased a ground floor flat in Barnard Castle in February 2005. The question was if we could estimate the price could be to prolong the lease by ninety years. Similar flats in Barnard Castle with a long lease were in the region of £218,000. The mid-range ground rent payable was £45 invoiced per annum. The lease termination date was in 2089. Taking into account 63 years left we estimated the premium to the landlord for the lease extension to be between £17,100 and £19,800 not including legals.