With a residential leasehold property in Diss, you are actually purchasing a right to reside in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly once there are less than eighty years remaining. Leasehold owners in Diss with a lease approaching 81 years left should seriously consider extending it as soon as possible. When a lease has less than eighty years remaining, under the relevant Act the freeholder can calculate and levy a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold properties in Diss with in excess of one hundred years left on the lease are sometimes regarded as a ‘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 merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Diss,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Diss valuers.
Reuben owned a 2 bedroom flat in Diss being marketed with a lease of a little over sixty years unexpired. Reuben informally spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Reuben to exercise his statutory right. Reuben obtained expert legal guidance and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Last Autumn we were contacted by Mrs Robyn Brooks , who bought a purpose-built apartment in Diss in November 2007. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Identical residencies in Diss with an extended lease were valued around £255,000. The average ground rent payable was £50 billed every twelve months. The lease came to a finish on 12 February 2096. Considering the 71 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
In 2009 we were called by Mrs Nicole Wood who, having moved into a ground floor flat in Diss in April 1998. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Comparative premises in Diss with 100 year plus lease were in the region of £254,200. The average amount of ground rent was £60 collected annually. The lease lapsed in 2076. Taking into account 51 years outstanding we approximated the premium to the landlord for the lease extension to be between £43,700 and £50,600 exclusive of legals.