When it comes to domestic leasehold premises in Killamarsh, you are actually purchasing an entitlement to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are fewer than 80 years left. Residents in Killamarsh with a lease approaching 81 years unexpired should seriously consider extending it sooner as opposed to later. Once a lease has less than eighty years left, under the relevant legislation the freeholder is entitled to calculate and demand a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold premises in Killamarsh with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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; |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Killamarsh 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 conveyancer we work with provide it.
Trailing unsuccessful correspondence with the freeholder of her garden flat in Killamarsh, Laura commenced the lease extension process as the 80 year deadline was swiftly approaching. The legal work was concluded in July 2010. The landlord’s charges were kept to an absolute minimum.
In 2013 we were approached by Dr W Bonnet who, having was assigned a lease of a ground floor flat in Killamarsh in April 2012. The question was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Killamarsh with an extended lease were in the region of £218,400. The mid-range amount of ground rent was £60 billed per annum. The lease elapsed in 2084. Given that there were 59 years remaining we calculated the compensation to the freeholder to extend the lease to be within £27,600 and £31,800 exclusive of costs.
Mr and Mrs. U Rodríguez bought a one bedroom flat in Killamarsh in November 1995. We are asked if we could approximate the premium would likely be to prolong the lease by ninety years. Identical residencies in Killamarsh with 100 year plus lease were valued about £205,000. The average amount of ground rent was £50 billed yearly. The lease ran out in 2104. Taking into account 79 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of legals.