When it comes to residential leasehold premises in Grangetown, you are actually purchasing a right to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially once there are fewer than 80 years left. Anyone in Grangetown with a lease nearing 81 years remaining should seriously think of extending it sooner as opposed to later. Once the lease term has less than 80 years left, under the current statute the landlord is entitled to calculate and charge a larger premium, based on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in Grangetown with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant 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. |
| 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 greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
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 relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Oscar owned a 2 bedroom apartment in Grangetown on the market with a lease of a little over sixty years outstanding. Oscar informally contacted his freeholder a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Oscar to invoke his statutory right. Oscar procured expert advice and secured satisfactory deal informally and sell the flat.
In 2009 we were e-mailed by Dr E James who, having owned a ground floor apartment in Grangetown in August 2001. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Identical residencies in Grangetown with a long lease were worth £300,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease ran out on 18 April 2101. Having 76 years outstanding we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 plus professional charges.
In 2012 we were phoned by Mrs C Gray who, having bought a first floor flat in Grangetown in May 2001. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Similar homes in Grangetown with 100 year plus lease were valued about £257,800. The mid-range ground rent payable was £65 billed yearly. The lease came to a finish in 2090. Given that there were 65 years as a residual term we approximated the premium to the landlord for the lease extension to be within £18,100 and £20,800 not including fees.