With a domestic leasehold premises in Carnforth, you effectively rent it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should consider extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive notably when there are less than 80 years left. Anyone in Carnforth with a lease drawing near to 81 years unexpired should seriously consider extending it as soon as possible. Once the lease term has fewer than eighty years remaining, under the relevant Act the freeholder is entitled to calculate and charge a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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 lawyers that we work with handle Carnforth 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.
Adam owned a conversion flat in Carnforth on the market with a lease of just over 59 years unexpired. Adam 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 was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Adam to invoke his statutory right. Adam procured expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
Last Autumn we were e-mailed by Mr and Mrs. F Vincent , who moved into a basement flat in Carnforth in March 2000. The question was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative flats in Carnforth with 100 year plus lease were valued around £285,000. The mid-range ground rent payable was £45 billed per annum. The lease ran out in 2098. Given that there were 72 years unexpired we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus expenses.
In 2011 we were called by Dr S Allen who, having purchased a ground floor flat in Carnforth in November 1996. The question was if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Identical premises in Carnforth with a long lease were valued around £233,200. The average ground rent payable was £60 invoiced annually. The lease came to a finish in 2087. Considering the 61 years unexpired we approximated the compensation to the landlord to extend the lease to be between £22,800 and £26,400 plus fees.