When it comes to domestic leasehold premises in Cowes, you are actually buying an entitlement to live in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may 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 gets disproportionately greater notably once there are less than eighty years remaining. Residents in Cowes with a lease nearing 81 years left should seriously think of extending it sooner rather than later. When the lease term has below 80 years outstanding, under the current Act the landlord can calculate and charge a larger premium, assessed on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Cowes with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Cowes,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cowes valuers.
Nathaniel owned a conversion apartment in Cowes being marketed with a lease of fraction over 61 years outstanding. Nathaniel on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Nathaniel to exercise his statutory right. Nathaniel procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Mr C Rodríguez took over the lease of a studio apartment in Cowes in June 2006. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by an additional years. Comparable flats in Cowes with a long lease were in the region of £275,000. The average ground rent payable was £55 invoiced monthly. The lease ended in 2102. Considering the 77 years as a residual term we estimated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including professional charges.
Last Autumn we were called by Dr N Stewart , who bought a one bedroom flat in Cowes in November 2008. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Similar premises in Cowes with a long lease were worth £183,600. The mid-range ground rent payable was £65 billed quarterly. The lease expired on 12 February 2082. Given that there were 57 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including expenses.