With a domestic leasehold property in Leagrave and Chalton, you are actually purchasing an entitlement to live in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater especially when there are less than eighty years left. Residents in Leagrave and Chalton with a lease nearing 81 years remaining should seriously think of extending it without delay. When the lease term has less than eighty years outstanding, under the relevant legislation the landlord can calculate and charge a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold residencies in Leagrave and Chalton with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant 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; |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Retaining our service will provide you better control over the value of your Leagrave and Chalton leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy correspondence with the freeholder of her basement flat in Leagrave and Chalton, Isabella commenced the lease extension process just as the lease was nearing the crucial eighty-year deadline. The legal work was finalised in October 2013. The landlord’s costs were restricted to less than 550 pounds.
In 2014 we were called by Mr S Dupont who, having acquired a basement apartment in Leagrave and Chalton in November 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Leagrave and Chalton with an extended lease were valued around £290,000. The mid-range amount of ground rent was £45 collected every twelve months. The lease end date was on 21 October 2098. Given that there were 73 years outstanding we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.
Last May we were phoned by Dr U Garcia , who owned a one bedroom flat in Leagrave and Chalton in April 1996. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Similar homes in Leagrave and Chalton with an extended lease were in the region of £240,600. The average ground rent payable was £65 billed monthly. The lease ran out in 2087. Taking into account 62 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of costs.