Berkhamsted leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Berkhamsted residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Berkhamsted you would be well advised to see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Berkhamsted with in excess of 100 years unexpired 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 property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 handle Berkhamsted 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 lawyer we work with provide it.
Subsequent to protracted discussions with the freeholder of her one bedroom flat in Berkhamsted, Caitlin started the lease extension process as the eighty year deadline was swiftly approaching. The transaction was concluded in January 2011. The freeholder’s fees were kept to an absolute minimum.
Last Spring we were called by Mr and Mrs. I Lee , who completed a newly refurbished flat in Berkhamsted in September 2009. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by 90 years. Identical properties in Berkhamsted with a long lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced yearly. The lease lapsed on 6 March 2100. Considering the 74 years left we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.
In 2011 we were called by Mrs Holly Lefèvre who, having purchased a newly refurbished flat in Berkhamsted in October 2003. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Comparable properties in Berkhamsted with a long lease were worth £166,400. The mid-range amount of ground rent was £60 invoiced quarterly. The lease elapsed on 7 March 2080. Considering the 54 years left we estimated the premium to the landlord for the lease extension to be between £32,300 and £37,400 not including costs.