Unfortunately that a Booker residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Booker property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining drops below eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Booker will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
Leasehold properties in Booker with more than 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 premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| 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 also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Booker leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Matthew, came precariously close to the 80-year threshold with the lease on his garden flat in Booker. Having bought his property two decades ago, the unexpired term was of no significance. Thankfully, he noticed he would soon be paying way over the odds for a lease extension. Matthew extended the lease just under the wire last March. Matthew and the landlord ultimately agreed on the final figure of £5,000 . If the lease had dipped to less than eighty years, the amount would have increased by a minimum £875.
In 2012 we were phoned by Mr and Mrs. V Robinson who, having acquired a one bedroom flat in Booker in May 1998. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparable homes in Booker with a long lease were valued about £227,800. The mid-range amount of ground rent was £45 invoiced per annum. The lease ended on 14 October 2090. Taking into account 65 years as a residual term we calculated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including fees.
Dr Logan Morel acquired a ground floor flat in Booker in October 2003. We are asked if we could approximate the price would be to extend the lease by 90 years. Identical homes in Booker with an extended lease were worth £275,000. The mid-range ground rent payable was £55 billed every twelve months. The lease came to a finish in 2101. Having 76 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.