With a residential leasehold property in Long Melford, you effectively rent it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly when there are less than eighty years left. Anyone in Long Melford with a lease drawing near to 81 years left should seriously consider extending it without delay. Once the lease term has less than eighty years remaining, under the relevant legislation the landlord is entitled to calculate and charge a larger premium, based on a technical calculation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with procure Long Melford 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.
14 months ago Joshua, came very near to the eighty-year threshold with the lease on his garden flat in Long Melford. Having purchased his property 19 years ago, the lease term was of little significance. Thankfully, he recognised he would soon be paying way over the odds for Extending the lease. Joshua extended the lease just ahead of time in July. Joshua and the landlord in the end settled on an amount of £6,000 . If the lease had fallen lower than eighty years, the amount would have increased by a minimum £900.
Last year we were called by Mr and Mrs. H Gray , who purchased a first floor flat in Long Melford in June 2004. We are asked if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Comparative homes in Long Melford with an extended lease were valued about £245,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease came to a finish on 4 May 2094. Taking into account 68 years left we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.
Mrs Laura Thomas owned a first floor flat in Long Melford in October 1999. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by 90 years. Similar homes in Long Melford with a long lease were valued about £285,000. The average ground rent payable was £55 billed annually. The lease expiry date was in 2105. Having 79 years outstanding we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus professional charges.