When it comes to residential leasehold premises in Gotham, you effectively rent it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years remaining. Residents in Gotham with a lease drawing near to 81 years left should seriously think of extending it without delay. When a lease has less than 80 years remaining, under the current Act the freeholder is entitled to calculate and levy a greater premium, based on a technical calculation, known as “marriage value” which is payable.
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Gotham 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 conveyancer we work with provide it.
Dexter owned a studio apartment in Gotham being sold with a lease of a little over 72 years outstanding. Dexter on an informal basis contacted his landlord a well known London-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Mr O Williams took over the lease of a newly refurbished flat in Gotham in March 2003. The question was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar properties in Gotham with 100 year plus lease were valued around £256,600. The average amount of ground rent was £60 invoiced yearly. The lease lapsed in 2078. Given that there were 52 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £39,000 and £45,000 plus fees.
In 2013 we were called by Ms Lauren Adams who, having bought a ground floor apartment in Gotham in September 2004. The question was if we could approximate the premium would be for a ninety year lease extension. Comparable flats in Gotham with 100 year plus lease were in the region of £218,000. The average ground rent payable was £45 billed yearly. The lease concluded on 16 April 2089. Considering the 63 years outstanding we calculated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 exclusive of costs.