Farnham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Farnham residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Farnham you really ought to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Farnham leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Lucas, came dangerously near to the eighty-year threshold with the lease on his garden apartment in Farnham. Having purchased his property two decades ago, the lease term was of little bearing. by good luck, he realised he needed to take action soon on a lease extension. Lucas arranged for a lease extension at the eleventh hour last May. Lucas and the freeholder via the management company eventually agreed on a premium of £5,000 . If he failed to meet the deadline, the premium would have become more costly by a minimum £875.
Last month we were contacted by Mr and Mrs. H Cooper , who was assigned a lease of a first floor apartment in Farnham in March 2007. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Similar flats in Farnham with a long lease were in the region of £280,000. The average amount of ground rent was £45 invoiced per annum. The lease lapsed in 2095. Considering the 70 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.
Mr G Wright moved into a recently refurbished flat in Farnham in July 2001. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Identical homes in Farnham with an extended lease were valued around £218,400. The average amount of ground rent was £60 invoiced every twelve months. The lease terminated in 2084. Considering the 59 years outstanding we estimated the premium to the landlord to extend the lease to be between £27,600 and £31,800 plus professional charges.