It’s an underpublicised certainty that a Callerton residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Callerton property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining dips under 80 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 additional value that a lease extension will add the property Most flat owners in Callerton will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold premises in Callerton with more than one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Callerton 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 conveyancing solicitor we work with provide it.
In recent months Gabriel, started to get near to the eighty-year threshold with the lease on his garden apartment in Callerton. In buying his home twenty years previously, the lease term was of minimal bearing. Luckily, it dawned on him that he needed to take action soon on a lease extension. Gabriel arranged for a lease extension just in the nick of time last April. Gabriel and the landlord subsequently agreed on the final figure of £5,500 . If the lease had dropped to less than 80 years, the sum would have escalated by a minimum £1,100.
Last Summer we were approach by Dr D Harris , who bought a studio apartment in Callerton in September 2012. We are asked if we could approximate the premium would be to prolong the lease by ninety years. Similar properties in Callerton with an extended lease were valued about £213,600. The mid-range ground rent payable was £60 collected quarterly. The lease finished on 28 August 2082. Given that there were 57 years outstanding we approximated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 exclusive of professional charges.
Mr Freddie Leroy was assigned a lease of a basement apartment in Callerton in February 2006. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparative homes in Callerton with an extended lease were valued around £200,000. The mid-range ground rent payable was £50 invoiced per annum. The lease ended on 3 May 2102. Considering the 77 years outstanding we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including costs.