When it comes to domestic leasehold premises in Chesterton, you effectively rent it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are less than eighty years left. Leasehold owners in Chesterton with a lease drawing near to 81 years remaining should seriously think of extending it without delay. Once the lease term has fewer than 80 years outstanding, under the current Act the landlord can calculate and demand a larger premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold premises in Chesterton with more than 100 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 home. In such situations there is often little upside in buying 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancers that we work with handle Chesterton 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 lawyer we work with provide it.
Subsequent to unsuccessful correspondence with the landlord of her studio apartment in Chesterton, Kirsty commenced the lease extension process just as her lease was approaching the crucial eighty-year mark. The legal work was concluded in March 2012. The freeholder’s fees were restricted to about 450 GBP.
Last Autumn we were called by Mr and Mrs. B James , who took over the lease of a ground floor flat in Chesterton in April 2012. The question was if we could approximate the price could be for a ninety year extension to my lease. Similar flats in Chesterton with a long lease were in the region of £181,600. The mid-range amount of ground rent was £55 collected quarterly. The lease ran out on 2 June 2077. Considering the 52 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 plus legals.
In 2012 we were contacted by Mr Stanley Reed who, having owned a one bedroom apartment in Chesterton in February 2009. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Comparable residencies in Chesterton with a long lease were valued around £285,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease concluded on 1 August 2097. Considering the 72 years remaining we estimated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.