Leatherhead leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Leatherhead tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Leatherhead you should see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 Leatherhead 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.
18 months ago Samuel, came seriously close to the 80-year mark with the lease on his ground floor flat in Leatherhead. Having purchased his home twenty years ago, the length of the lease was of no relevance. As luck would have it, he became aware that he would imminently be paying way over the odds for Extending the lease. Samuel was able to extend his lease at the eleventh hour in January. Samuel and the freeholder via the management company in the end settled on sum of £5,000 . If the lease had dipped below 80 years, the amount would have gone up by a minimum £850.
Mr and Mrs. E Cook bought a newly refurbished flat in Leatherhead in June 1998. The dilemma was if we could estimate the price would likely be to prolong the lease by 90 years. Identical properties in Leatherhead with a long lease were worth £191,400. The average amount of ground rent was £55 invoiced yearly. The lease lapsed in 2079. Given that there were 54 years remaining we calculated the premium to the freeholder to extend the lease to be between £34,200 and £39,600 not including legals.
Last Christmas we were approach by Mr and Mrs. Y Ali , who bought a ground floor apartment in Leatherhead in September 1999. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in Leatherhead with an extended lease were valued around £295,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease end date was on 4 May 2099. Given that there were 74 years outstanding we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including expenses.