With a long leasehold property in Berrylands, you are in fact renting it for a certain 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 think about a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater particularly when there are fewer than 80 years remaining. Anyone in Berrylands with a lease nearing 81 years remaining should seriously think of extending it as soon as possible. Once the lease term has below eighty years left, under the relevant statute the landlord can calculate and demand a greater premium, based on a technical multiplication, known as “marriage value” which is due.
Leasehold residencies in Berrylands with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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; |
| Birmingham Midshires | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Berrylands 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.
Mason owned a conversion flat in Berrylands being sold with a lease of just over fifty eight years unexpired. Mason on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Mason to exercise his statutory right. Mason obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the flat.
Dr N Cooper took over the lease of a one bedroom apartment in Berrylands in February 2004. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Comparable homes in Berrylands with a long lease were in the region of £290,000. The average ground rent payable was £60 collected yearly. The lease ran out in 2106. Having 80 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including fees.
An example of a Lease Extension decision for a Berrylands residence is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case affected 1 flat.