There is no doubt about it a leasehold flat or house in Birkenshaw is a wasting asset as a result of the diminishing lease term. Where the residual term has, in excess of 100 years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has under than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main logic behind why you should extend the lease sooner than later. Most flat owners in Birkenshaw will qualify for this right; nevertheless a conveyancer can advise whether you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally considered that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for decades to come.
| 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Birkenshaw,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Birkenshaw valuers.
Liam owned a conversion flat in Birkenshaw being sold with a lease of a little over 59 years left. Liam on an informal basis contacted his landlord being a well known London-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 new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Liam to invoke his statutory right. Liam procured expert legal guidance and secured an acceptable resolution informally and readily saleable.
Last Autumn we were phoned by Mr and Mrs. T Williams , who acquired a basement flat in Birkenshaw in May 1996. We are asked if we could approximate the premium could be to prolong the lease by 90 years. Comparative properties in Birkenshaw with a long lease were valued about £252,800. The average amount of ground rent was £65 invoiced yearly. The lease concluded in 2091. Given that there were 65 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 plus costs.
Last year we were approach by Ms Erin Morris , who took over the lease of a studio apartment in Birkenshaw in September 2000. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Identical premises in Birkenshaw with 100 year plus lease were worth £191,400. The average amount of ground rent was £55 collected every twelve months. The lease concluded in 2080. Having 54 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 not including professional charges.