With a long leasehold premises in Droylsden, you are actually purchasing an entitlement to live in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should 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 increases markedly notably once there are fewer than 80 years left. Anyone in Droylsden with a lease drawing near to 81 years remaining should seriously consider extending it sooner rather than later. Once the lease term has below 80 years outstanding, under the relevant statute the freeholder can calculate and demand a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold residencies in Droylsden with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
The lawyers that we work with handle Droylsden lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Following unsuccessful discussions with the landlord of her purpose-built apartment in Droylsden, Courtney commenced the lease extension process as the 80 year mark was swiftly approaching. The lease extension completed in May 2014. The landlord’s fees were kept to an absolute minimum.
Ms V Pérez owned a purpose-built apartment in Droylsden in June 2000. The question was if we could approximate the price would be to extend the lease by a further 90 years. Identical premises in Droylsden with an extended lease were in the region of £295,000. The mid-range ground rent payable was £45 collected yearly. The lease expiry date was on 1 May 2099. Given that there were 74 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.
In 2011 we were called by Mr R Petit who, having completed a first floor flat in Droylsden in September 2004. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by an additional years. Similar flats in Droylsden with 100 year plus lease were worth £243,000. The average amount of ground rent was £65 billed per annum. The lease termination date was on 26 October 2088. Having 63 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 plus expenses.