On the balance of probabilities where you own a flat in March you actually own a long leasehold interest over your property
Leasehold residencies in March with more than one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your March leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful negotiations with the freeholder of her two bedroom flat in March, Chelsea commenced the lease extension process as the eighty year threshold was rapidly advancing. The lease extension was finalised in September 2012. The landlord’s fees were negotiated to about 450 pounds.
Last Christmas we were approach by Ms Ellen King , who was assigned a lease of a newly refurbished apartment in March in October 2006. We are asked if we could estimate the premium could be to prolong the lease by 90 years. Comparative properties in March with an extended lease were valued around £206,200. The average amount of ground rent was £55 collected monthly. The lease came to a finish in 2081. Having 56 years outstanding we calculated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 not including legals.
Mr and Mrs. A Roberts completed a studio apartment in March in October 2000. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Comparative properties in March with an extended lease were worth £300,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease end date was in 2101. Given that there were 76 years outstanding we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.