When it comes to long leasehold premises in Eastleigh, you are in fact renting it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension 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 left. Leasehold owners in Eastleigh with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. When the lease term has below 80 years outstanding, under the current legislation the landlord can calculate and charge a larger amount, based on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you better control over the value of your Eastleigh leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Freddie owned a studio flat in Eastleigh being marketed with a lease of fraction over 72 years outstanding. Freddie informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Freddie to exercise his statutory right. Freddie procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the property.
In 2010 we were phoned by Mrs U Michel who, having owned a purpose-built flat in Eastleigh in July 2002. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by an additional years. Comparative residencies in Eastleigh with 100 year plus lease were worth £280,000. The mid-range amount of ground rent was £45 invoiced annually. The lease lapsed in 2095. Taking into account 70 years as a residual term we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.
Mr and Mrs. C Dupont completed a studio apartment in Eastleigh in November 2005. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparative residencies in Eastleigh with an extended lease were worth £223,400. The mid-range ground rent payable was £60 invoiced every twelve months. The lease end date was on 21 May 2084. Given that there were 59 years left we estimated the premium to the landlord for the lease extension to be between £27,600 and £31,800 plus costs.