When it comes to long leasehold premises in Desborough, you are in fact renting it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than 80 years left. Residents in Desborough with a lease approaching 81 years remaining should seriously consider extending it without delay. Once a lease has below eighty years outstanding, under the relevant Act the landlord can calculate and levy a greater premium, based on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you enhanced control over the value of your Desborough leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Ali, started to get close to the 80-year mark with the lease on his studio apartment in Desborough. In buying his property 19 years previously, the unexpired term was of no interest. As luck would have it, he realised he needed to take action soon on Extending the lease. Ali arranged for a lease extension just ahead of time last May. Ali and the freeholder via the managing agents eventually settled on the final figure of £6,000 . If the lease had slid to less than eighty years, the price would have increased by a minimum £875.
In 2009 we were phoned by Mr Dylan Johnson who, having owned a garden apartment in Desborough in June 1997. We are asked if we could estimate the price could be for a ninety year lease extension. Identical residencies in Desborough with an extended lease were in the region of £216,000. The mid-range ground rent payable was £60 billed per annum. The lease expired in 2084. Given that there were 58 years remaining we approximated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 not including costs.
Last year we were approach by Mr and Mrs. I Leroy , who bought a garden apartment in Desborough in June 2002. The question was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Identical premises in Desborough with an extended lease were in the region of £200,000. The average ground rent payable was £50 billed monthly. The lease ran out in 2104. Considering the 78 years outstanding we estimated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus costs.