When it comes to long leasehold premises in Gunnislake, you are actually purchasing an entitlement to live in a property for a set period 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 lengthy period of time, you should think about 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 gets disproportionately greater especially when there are fewer than eighty years left. Leasehold owners in Gunnislake with a lease approaching 81 years left should seriously consider extending it without delay. Once a lease has less than eighty years remaining, under the current statute the landlord is entitled to calculate and levy a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
It is generally accepted that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 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 |
|---|---|
| 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; |
| Halifax | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Gunnislake 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 lawyer we work with provide it.
During the course of the last few months Stanley, started to get close to the 80-year threshold with the lease on his ground floor flat in Gunnislake. In buying his flat two decades ago, the unexpired term was of little concern. Thankfully, he noticed he would imminently be paying an inflated amount for a lease extension. Stanley extended the lease just under the wire last June. Stanley and the landlord who owned the flat above subsequently agreed on an amount of £5,000 . If he failed to meet the deadline, the sum would have escalated by at least £925.
Last Christmas we were called by Mr and Mrs. E Cox , who took over the lease of a basement apartment in Gunnislake in August 2010. The dilemma was if we could approximate the premium would be to prolong the lease by a further 90 years. Comparable homes in Gunnislake with an extended lease were in the region of £203,200. The mid-range ground rent payable was £65 billed yearly. The lease finished in 2087. Given that there were 61 years outstanding we approximated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 exclusive of fees.
In 2014 we were phoned by Mr and Mrs. K Nguyen who, having moved into a first floor flat in Gunnislake in April 2000. The question was if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Similar properties in Gunnislake with a long lease were worth £260,000. The mid-range ground rent payable was £50 invoiced annually. The lease lapsed on 12 February 2098. Having 72 years left we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus fees.