Farnham Common leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Most owners of residential leasehold property in Farnham Common enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Farnham Common you really ought to investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Farnham Common,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Farnham Common valuers.
Last Autumn Hugo, came dangerously close to the eighty-year threshold with the lease on his ground floor flat in Farnham Common. In buying his property twenty years ago, the lease term was of little concern. Luckily, he realised he would soon be paying way over the odds for Extending the lease. Hugo was able to extend his lease just under the wire in September. Hugo and the landlord who owned the flat above ultimately settled on a premium of £6,000 . If he not met the deadline, the figure would have escalated by a minimum £1,000.
Last Summer we were contacted by Dr Laura Davies , who completed a newly refurbished apartment in Farnham Common in July 2003. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by ninety years. Identical residencies in Farnham Common with an extended lease were valued around £225,400. The mid-range amount of ground rent was £45 invoiced monthly. The lease terminated on 28 November 2090. Considering the 64 years left we calculated the premium to the landlord for the lease extension to be within £15,200 and £17,600 exclusive of costs.
Last Autumn we were contacted by Mr and Mrs. Y Campbell , who purchased a basement flat in Farnham Common in November 1998. The dilemma was if we could estimate the premium would likely be for a 90 year lease extension. Comparable flats in Farnham Common with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 invoiced every twelve months. The lease expired in 2101. Taking into account 75 years remaining we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of fees.