When it comes to domestic leasehold premises in Battle, you are actually buying an entitlement to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly once there are fewer than 80 years left. Leasehold owners in Battle with a lease drawing near to 81 years remaining should seriously think of extending it without delay. When the lease term has below eighty years remaining, under the relevant Act the landlord is entitled to calculate and levy a larger amount, based on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold premises in Battle with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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 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; |
| Coventry Building Society | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire Building Society | 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. |
The conveyancers that we work with undertake Battle 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.
Tommy was the the leasehold proprietor of a studio apartment in Battle being sold with a lease of fraction over fifty eight years remaining. Tommy on an informal basis contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Tommy to invoke his statutory right. Tommy obtained expert advice and was able to make a more informed decision and deal with the matter and sell the property.
In 2010 we were approached by Mr A Clark who, having acquired a first floor flat in Battle in June 2008. The question was if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Comparable flats in Battle with a long lease were worth £198,800. The average ground rent payable was £55 collected yearly. The lease ran out in 2080. Having 55 years outstanding we estimated the premium to the landlord for the lease extension to be within £33,300 and £38,400 plus legals.
In 2012 we were approached by Mr Nathaniel Mercier who, having owned a recently refurbished flat in Battle in April 1999. We are asked if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Comparable residencies in Battle with a long lease were worth £295,000. The average amount of ground rent was £50 billed per annum. The lease ran out on 7 February 2100. Taking into account 75 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of fees.