When it comes to long leasehold premises in Castle Donington, 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 lengthy period of time, you should consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly when there are less than eighty years remaining. Leasehold owners in Castle Donington with a lease approaching 81 years remaining should seriously think of extending it sooner as opposed to later. Once the lease term has under eighty years remaining, under the relevant legislation the landlord is entitled to calculate and charge a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold premises in Castle Donington with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Castle Donington,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Castle Donington valuers.
Last October Harry, came dangerously close to the 80-year mark with the lease on his first floor flat in Castle Donington. In buying his home two decades ago, the unexpired term was of little significance. As luck would have it, he noticed he needed to take action soon on Extending the lease. Harry extended the lease just ahead of time last August. Harry and the freeholder subsequently settled on a premium of £5,500 . If the lease had slid below 80 years, the amount would have become more costly by a minimum £950.
In 2014 we were phoned by Ms H Phillips who, having owned a first floor flat in Castle Donington in November 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Identical properties in Castle Donington with 100 year plus lease were valued about £295,000. The average ground rent payable was £45 billed yearly. The lease ran out in 2099. Given that there were 74 years left we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.
Last year we were called by Mr and Mrs. E Scott , who moved into a purpose-built apartment in Castle Donington in July 2003. We are asked if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparative residencies in Castle Donington with a long lease were worth £243,000. The average amount of ground rent was £65 collected monthly. The lease terminated on 11 August 2088. Having 63 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 exclusive of expenses.