There is no doubt about it a leasehold flat or house in Gillingham is a wasting asset as a result of the diminishing lease term. Where the residual term has, more than 99 years to run then this decrease may be of little impact however there will become a stage when a lease has fewer than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should consider extending without delay. Many flat owners in Gillingham will qualify for this right; that being said a conveyancer will be able to confirm whether you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in Gillingham with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with handle Gillingham 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 conveyancing solicitor we work with provide it.
Trailing protracted discussions with the freeholder of her two bedroom flat in Gillingham, Sophia started the lease extension process just as her lease was approaching the all-important 80-year threshold. The transaction was finalised in June 2008. The freeholder’s costs were restricted to a tad over 650 pounds.
Last Winter we were approach by Mrs G Turner , who completed a purpose-built apartment in Gillingham in January 1998. The dilemma was if we could approximate the premium would likely be to extend the lease by ninety years. Identical premises in Gillingham with 100 year plus lease were valued around £255,000. The average ground rent payable was £50 invoiced yearly. The lease lapsed on 18 August 2097. Having 71 years unexpired we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
In 2014 we were contacted by Dr Callum González who, having purchased a ground floor apartment in Gillingham in February 2003. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by an additional years. Similar properties in Gillingham with an extended lease were worth £254,200. The mid-range ground rent payable was £60 invoiced every twelve months. The lease ran out in 2077. Taking into account 51 years outstanding we estimated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 not including costs.