With a long leasehold property in Guildford, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater notably once there are less than eighty years remaining. Residents in Guildford with a lease drawing near to 81 years left should seriously consider extending it without delay. Once a lease has below 80 years remaining, under the current legislation the landlord can calculate and levy a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a landlord in Guildford,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Guildford valuers.
Adam owned a high value flat in Guildford on the market with a lease of a few days over sixty years left. Adam on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Adam to exercise his statutory right. Adam procured expert advice and was able to make an informed judgement and handle with the matter and sell the property.
In 2013 we were approached by Ms F Campbell who, having moved into a purpose-built apartment in Guildford in January 1998. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparable properties in Guildford with a long lease were worth £260,200. The average amount of ground rent was £65 billed per annum. The lease ran out in 2092. Given that there were 66 years remaining we estimated the compensation to the landlord for the lease extension to be within £14,300 and £16,400 not including expenses.
Mr Callum Stewart took over the lease of a one bedroom flat in Guildford in February 2003. The question was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable residencies in Guildford with 100 year plus lease were in the region of £198,800. The average amount of ground rent was £55 collected monthly. The lease terminated on 25 October 2081. Taking into account 55 years unexpired we calculated the premium to the landlord for the lease extension to be between £33,300 and £38,400 not including professional charges.