When it comes to long leasehold premises in Machen, you are actually buying an entitlement to reside in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are less than 80 years left. Residents in Machen with a lease drawing near to 81 years unexpired should seriously think of extending it without delay. Once the lease term has below eighty years outstanding, under the current statute the landlord can calculate and demand a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Machen 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 conveyancer we work with provide it.
Trailing lengthy discussions with the freeholder of her leasehold flat in Machen, Victoria commenced the lease extension process as the 80 year deadline was fast nearing. The transaction completed in September 2005. The landlord’s fees were restricted to below 650 pounds.
Last Autumn we were e-mailed by Mr and Mrs. J Moreau , who completed a basement flat in Machen in June 1998. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Comparable properties in Machen with a long lease were valued about £300,000. The mid-range amount of ground rent was £50 billed yearly. The lease expired on 10 January 2102. Given that there were 76 years unexpired we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus fees.
Mr H Edwards was assigned a lease of a ground floor flat in Machen in November 1995. The question was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparative flats in Machen with an extended lease were valued about £257,800. The mid-range amount of ground rent was £65 collected quarterly. The lease ended in 2091. Taking into account 65 years left we estimated the premium to the freeholder for the lease extension to be within £18,100 and £20,800 plus costs.