When it comes to domestic leasehold property in Hoyland, you are actually buying a right to reside in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than 80 years left. Residents in Hoyland with a lease drawing near to 81 years remaining should seriously think of extending it without delay. Once the lease term has under 80 years outstanding, under the relevant statute the landlord is entitled to calculate and demand a greater premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold residencies in Hoyland with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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 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; |
| Chelsea 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Hoyland,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 in-depth market knowledge and the close ties they enjoy with Hoyland valuers.
Harry owned a studio flat in Hoyland being marketed with a lease of a little over 61 years outstanding. Harry informally approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Harry to invoke his statutory right. Harry obtained expert advice and was able to make an informed judgement and deal with the matter and sell the flat.
Last Christmas we were contacted by Mr and Mrs. V Morel , who acquired a garden flat in Hoyland in March 2007. The question was if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Identical premises in Hoyland with a long lease were valued around £176,200. The average ground rent payable was £65 collected per annum. The lease expired on 22 March 2081. Given that there were 56 years outstanding we estimated the compensation to the landlord for the lease extension to be between £29,500 and £34,000 exclusive of legals.
Mr and Mrs. D Parker was assigned a lease of a studio flat in Hoyland in August 1995. The dilemma was if we could approximate the price could be for a ninety year lease extension. Comparable properties in Hoyland with an extended lease were valued about £237,600. The mid-range amount of ground rent was £45 billed yearly. The lease finished in 2092. Having 67 years outstanding we calculated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 plus fees.