With a long leasehold premises in Gosforth, you are actually buying a right to reside in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are less than eighty years left. Anyone in Gosforth with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once the lease term has below eighty years remaining, under the current statute the landlord is entitled to calculate and demand a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a freeholder in Gosforth,the lease extension solicitors 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 Gosforth valuers.
Last year Luca, came seriously close to the 80-year mark with the lease on his two bedroom apartment in Gosforth. Having bought his home two decades ago, the length of the lease was of no bearing. by good luck, he realised he would soon be paying an escalated premium for a lease extension. Luca arranged for a lease extension at the eleventh hour last August. Luca and the landlord who owned the flat above in the end agreed on sum of £5,500 . If the lease had dipped to less than 80 years, the premium would have increased by at least £1,125.
Mr Joseph Bertrand moved into a purpose-built flat in Gosforth in August 2008. The dilemma was if we could approximate the price could be to extend the lease by 90 years. Similar premises in Gosforth with an extended lease were valued about £174,200. The mid-range ground rent payable was £55 billed yearly. The lease finished in 2077. Given that there were 51 years left we approximated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of fees.
In 2010 we were e-mailed by Mr U Bailey who, having bought a one bedroom flat in Gosforth in March 1996. The question was if we could approximate the price could be to prolong the lease by an additional years. Similar flats in Gosforth with 100 year plus lease were in the region of £285,000. The average ground rent payable was £45 invoiced monthly. The lease finished in 2097. Considering the 71 years as a residual term we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus professional charges.