As the length of the unexpired term of a Borrowash domestic lease lessens so does its value and therefore the value of your property. Where the residual term has, in excess of one hundred years remaining then this decrease may be of little impact however there will become a point in time when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner rather than later. The majority of flat owners in Borrowash will meet the qualifying criteria; nevertheless a conveyancing solicitor can confirm whether you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold premises in Borrowash with more than 100 years left on the lease are often referred to as ‘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 upside in purchasing the freehold unless savings on ground rent and service charges justify 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Borrowash,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 Borrowash valuers.
Lewis was the the leasehold owner of a studio flat in Borrowash being marketed with a lease of just over 61 years remaining. Lewis informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Lewis to exercise his statutory right. Lewis obtained expert legal guidance and was able to make an informed decision and handle with the matter and sell the flat.
Mr and Mrs. R López bought a purpose-built flat in Borrowash in November 2003. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable residencies in Borrowash with 100 year plus lease were valued around £255,000. The average ground rent payable was £50 billed monthly. The lease terminated in 2096. Given that there were 70 years remaining we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus expenses.
Mrs C Carter moved into a purpose-built flat in Borrowash in February 1996. The dilemma was if we could shed any light on how much (roughly) premium could be to extend the lease by a further 90 years. Comparative residencies in Borrowash with 100 year plus lease were worth £246,800. The mid-range ground rent payable was £60 invoiced monthly. The lease came to a finish in 2076. Taking into account 50 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £44,700 and £51,600 not including professional charges.