With a domestic leasehold property in Buckden, you effectively rent it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are fewer than 80 years remaining. Residents in Buckden with a lease nearing 81 years unexpired should seriously consider extending it sooner than later. Once a lease has less than 80 years remaining, under the relevant legislation the freeholder is entitled to calculate and charge a greater amount, based on a technical computation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
The conveyancing solicitors that we work with undertake Buckden 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 conveyancer we work with provide it.
After lengthy correspondence with the freeholder of her basement flat in Buckden, Chloe started the lease extension process as the eighty year deadline was quickly coming. The lease extension completed in June 2012. The freeholder’s fees were kept to an absolute minimum.
Last Summer we were contacted by Dr V Bonnet , who completed a purpose-built flat in Buckden in November 2005. The question was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparable properties in Buckden with 100 year plus lease were worth £191,400. The mid-range amount of ground rent was £55 collected quarterly. The lease expired in 2078. Having 54 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 plus professional charges.
In 2009 we were phoned by Ms A Turner who, having took over the lease of a one bedroom flat in Buckden in May 2000. The question was if we could approximate the premium would be to prolong the lease by an additional years. Identical premises in Buckden with 100 year plus lease were valued around £295,000. The mid-range amount of ground rent was £45 collected annually. The lease came to a finish on 25 May 2098. Considering the 74 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of fees.