With a residential leasehold property in Corston, you are in fact renting it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately greater especially when there are less than 80 years remaining. Leasehold owners in Corston with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. Once the lease term has below eighty years remaining, under the relevant statute the landlord is entitled to calculate and charge a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
It is generally accepted that a property with more than one hundred 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 residence will be equivalent in value to 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 are not acceptable. 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
Retaining our service gives you better control over the value of your Corston leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing unsuccessful negotiations with the freeholder of her two bedroom flat in Corston, Courtney commenced the lease extension process just as her lease was coming close to the all-important eighty-year deadline. The transaction completed in February 2010. The freeholder’s charges were negotiated to below 450 pounds.
Dr Alexandra Mason acquired a first floor apartment in Corston in November 2008. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Comparable flats in Corston with an extended lease were worth £233,200. The mid-range amount of ground rent was £60 invoiced monthly. The lease came to a finish on 17 September 2087. Taking into account 61 years remaining we calculated the compensation to the landlord to extend the lease to be between £22,800 and £26,400 plus costs.
In 2009 we were phoned by Ms K Carter who, having owned a first floor apartment in Corston in November 2000. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Identical homes in Corston with 100 year plus lease were valued around £166,800. The mid-range amount of ground rent was £50 invoiced quarterly. The lease elapsed on 4 June 2076. Considering the 50 years as a residual term we estimated the premium to the landlord to extend the lease to be within £32,300 and £37,400 plus professional charges.