When it comes to residential leasehold property in Leicester, you are in fact renting it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are less than 80 years left. Residents in Leicester with a lease nearing 81 years unexpired should seriously think of extending it as soon as possible. Once a lease has below 80 years left, under the relevant Act the landlord can calculate and charge a greater amount, assessed on a technical multiplication, known as “marriage value” which is payable.
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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 are not acceptable. 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Leicester,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Leicester valuers.
Noah owned a conversion flat in Leicester on the market with a lease of a little over 59 years remaining. Noah informally approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Noah to exercise his statutory right. Noah obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2012 we were phoned by Mr A Martin who, having owned a first floor apartment in Leicester in August 2008. We are asked if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Identical residencies in Leicester with 100 year plus lease were in the region of £295,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease finished on 4 November 2101. Given that there were 75 years left we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including professional charges.
Last Winter we were called by Ms R Harris , who bought a first floor flat in Leicester in November 1998. The question was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar premises in Leicester with an extended lease were in the region of £250,400. The average amount of ground rent was £65 invoiced yearly. The lease lapsed in 2090. Having 64 years remaining we estimated the premium to the landlord for the lease extension to be between £19,000 and £22,000 exclusive of professional charges.