There is no doubt about it a leasehold property in Grangetown is a wasting asset as a result of the diminishing lease term. If the lease has, over 100 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has under than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main reason why you should consider extending without delay. The majority of flat owners in Grangetown will meet the qualifying criteria; however a lawyer will be able to advise if you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to 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 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Grangetown,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Grangetown valuers.
George owned a studio flat in Grangetown on the market with a lease of a little over 72 years unexpired. George on an informal basis approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were George to invoke his statutory right. George obtained expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Dr B Martin purchased a ground floor apartment in Grangetown in June 2004. The dilemma was if we could approximate the premium could be for a ninety year lease extension. Identical flats in Grangetown with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 collected annually. The lease lapsed on 28 June 2096. Taking into account 71 years remaining we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.
Last month we were contacted by Dr J James , who took over the lease of a basement apartment in Grangetown in January 2007. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by a further 90 years. Identical homes in Grangetown with an extended lease were valued about £225,800. The average ground rent payable was £60 invoiced every twelve months. The lease elapsed in 2085. Taking into account 60 years outstanding we estimated the premium to the freeholder for the lease extension to be between £23,800 and £27,400 exclusive of expenses.