Longthorpe leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Longthorpe tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Longthorpe you must see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Longthorpe with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
Using our service will provide you enhanced control over the value of your Longthorpe leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Gabriel owned a conversion flat in Longthorpe being sold with a lease of a little over sixty years outstanding. Gabriel on an informal basis approached his landlord a well known Manchester-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Gabriel to invoke his statutory right. Gabriel obtained expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Mr and Mrs. Y Thompson took over the lease of a one bedroom flat in Longthorpe in June 2003. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Similar homes in Longthorpe with an extended lease were worth £200,000. The mid-range ground rent payable was £50 invoiced monthly. The lease lapsed in 2103. Taking into account 77 years unexpired we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.
Mr and Mrs. L Gunderson was assigned a lease of a ground floor apartment in Longthorpe in July 2003. The dilemma was if we could estimate the premium could be to extend the lease by 90 years. Similar premises in Longthorpe with an extended lease were worth £260,200. The average amount of ground rent was £65 billed quarterly. The lease ended on 22 January 2092. Given that there were 66 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £15,200 and £17,600 plus legals.