With a residential leasehold premises in Grangetown, you effectively rent it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than eighty years left. Residents in Grangetown with a lease approaching 81 years remaining should seriously think of extending it without delay. Once a lease has below eighty years outstanding, under the current statute the landlord can calculate and charge a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to 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 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 Grangetown 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 in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Hugo, started to get close to the eighty-year mark with the lease on his basement apartment in Grangetown. In buying his property two decades ago, the length of the lease was of little interest. Fortunately, he noticed he would imminently be paying way over the odds for Extending the lease. Hugo was able to extend his lease at the eleventh hour last July. Hugo and the freeholder in the end agreed on a premium of £6,000 . If the lease had slid to less than 80 years, the price would have increased by at least £1,150.
In 2009 we were e-mailed by Mr Milo Roberts who, having purchased a first floor apartment in Grangetown in April 1996. The dilemma was if we could shed any light on how much (approximately) price would be to extend the lease by an additional years. Comparative flats in Grangetown with an extended lease were valued about £208,600. The average ground rent payable was £60 collected per annum. The lease came to a finish in 2083. Having 57 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £30,400 and £35,200 not including expenses.
In 2014 we were phoned by Mr M Clarke who, having took over the lease of a newly refurbished apartment in Grangetown in April 1999. The question was if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Comparable premises in Grangetown with 100 year plus lease were in the region of £200,000. The mid-range amount of ground rent was £50 invoiced annually. The lease finished in 2103. Having 77 years remaining we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of costs.