With a long leasehold premises in Chipping Norton, you are actually buying a right to reside in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive notably once there are fewer than eighty years left. Residents in Chipping Norton with a lease drawing near to 81 years left should seriously think of extending it without delay. Once the lease term has below eighty years remaining, under the current Act the landlord can calculate and charge a larger amount, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be worth the same as 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Chipping Norton,the lease extension solicitors 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 Chipping Norton valuers.
Subsequent to lengthy discussions with the landlord of her garden flat in Chipping Norton, Lily commenced the lease extension process as the 80 year threshold was swiftly advancing. The transaction was finalised in October 2012. The landlord’s fees were kept to an absolute minimum.
Ms F Rose took over the lease of a one bedroom flat in Chipping Norton in May 2010. We are asked if we could approximate the price would likely be to prolong the lease by an additional years. Comparable flats in Chipping Norton with 100 year plus lease were in the region of £203,200. The average amount of ground rent was £65 collected yearly. The lease expired in 2086. Given that there were 61 years outstanding we approximated the premium to the landlord to extend the lease to be within £19,000 and £22,000 not including costs.
Last Christmas we were contacted by Mr W Wilson , who completed a one bedroom flat in Chipping Norton in July 1997. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Comparable premises in Chipping Norton with an extended lease were worth £260,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease terminated in 2097. Considering the 72 years as a residual term we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus costs.