With a long leasehold premises in Goodrich, you effectively rent it for a certain period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably when there are less than 80 years left. Residents in Goodrich with a lease approaching 81 years left should seriously think of extending it sooner than later. Once a lease has under 80 years remaining, under the current Act the landlord is entitled to calculate and charge a greater amount, based on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Goodrich with over 100 years left 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 reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Chelsea 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. |
| 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. |
| 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. |
Retaining our service will provide you increased control over the value of your Goodrich leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Ethan, came critically near to the 80-year mark with the lease on his basement apartment in Goodrich. Having purchased his home 19 years previously, the length of the lease was of minimal relevance. As luck would have it, he realised he needed to take action soon on Extending the lease. Ethan extended the lease at the eleventh hour in August. Ethan and the freeholder ultimately settled on a premium of £5,000 . If he not met the deadline, the sum would have increased by at least £925.
Dr Jason Jackson bought a one bedroom flat in Goodrich in March 2008. The dilemma was if we could approximate the premium could be for a ninety year lease extension. Comparable residencies in Goodrich with an extended lease were worth £243,000. The average amount of ground rent was £65 collected annually. The lease finished on 6 May 2089. Having 63 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £20,000 and £23,000 exclusive of costs.
In 2009 we were approached by Mrs C Stewart who, having acquired a one bedroom flat in Goodrich in January 2006. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Identical premises in Goodrich with 100 year plus lease were valued about £181,600. The average amount of ground rent was £55 invoiced yearly. The lease end date was in 2078. Taking into account 52 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 plus legals.