With a long leasehold property in Ditchling, you effectively rent it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about extending the lease 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 particularly when there are less than 80 years remaining. Residents in Ditchling with a lease nearing 81 years unexpired should seriously consider extending it sooner as opposed to later. Once the lease term has less than 80 years remaining, under the current Act the freeholder is entitled to calculate and demand a larger premium, assessed on a technical calculation, known as “marriage value” which is due.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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 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; |
| 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. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Engaging our service gives you enhanced control over the value of your Ditchling leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Finn, came precariously close to the 80-year mark with the lease on his studio apartment in Ditchling. Having bought his flat two decades ago, the length of the lease was of no significance. Thankfully, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Finn extended the lease just in the nick of time last March. Finn and the landlord eventually agreed on sum of £5,000 . If he failed to meet the deadline, the amount would have gone up by a minimum £1,100.
Dr U Ramírez purchased a studio flat in Ditchling in March 1995. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Identical residencies in Ditchling with 100 year plus lease were in the region of £166,400. The mid-range ground rent payable was £60 invoiced quarterly. The lease lapsed on 16 April 2080. Taking into account 54 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 exclusive of expenses.
In 2009 we were phoned by Mr and Mrs. V Harris who, having completed a studio flat in Ditchling in February 2010. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical properties in Ditchling with 100 year plus lease were in the region of £232,800. The average amount of ground rent was £45 billed monthly. The lease came to a finish on 9 March 2091. Considering the 65 years left we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.