With a residential leasehold property in Barnard Castle, you are actually purchasing an entitlement to reside in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than 80 years left. Residents in Barnard Castle with a lease drawing near to 81 years unexpired should seriously think of extending it without delay. When a lease has below 80 years left, under the relevant Act the freeholder is entitled to calculate and charge a larger amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you enhanced control over the value of your Barnard Castle leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ali owned a 2 bedroom flat in Barnard Castle on the market with a lease of a little over fifty eight years unexpired. Ali informally approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Ali to invoke his statutory right. Ali obtained expert legal guidance and was able to make an informed decision and handle with the matter and sell the property.
Last Christmas we were e-mailed by Dr D Taylor , who owned a purpose-built flat in Barnard Castle in May 1997. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparable homes in Barnard Castle with a long lease were valued around £232,800. The average amount of ground rent was £45 billed monthly. The lease came to a finish on 14 September 2090. Given that there were 65 years left we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of expenses.
In 2010 we were called by Dr Rory Brooks who, having acquired a garden flat in Barnard Castle in November 2010. The question was if we could estimate the premium would likely be for a ninety year lease extension. Comparative flats in Barnard Castle with a long lease were valued around £275,000. The average amount of ground rent was £55 billed quarterly. The lease elapsed in 2101. Taking into account 76 years as a residual term we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.