Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Marlborough. Clearly, the term of lease remaining shortens over time. This may pass by relatively unnoticed when the residence has to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to procure a lease extension. Qualifying leaseholders in Marlborough have the legal entitlement to extend the lease for an additional 90 years in accordance with legislation. You should give careful deliberation before putting off your Marlborough lease extension. Holding off that expense now simply increases the price you will eventually have to pay to extend your lease
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Engaging our service will provide you increased control over the value of your Marlborough leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Owen owned a studio flat in Marlborough on the market with a lease of a few days over 59 years remaining. Owen informally contacted his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Owen to exercise his statutory right. Owen obtained expert advice and secured satisfactory resolution without resorting to tribunal and sell the flat.
In 2009 we were phoned by Mr and Mrs. L Richardson who, having acquired a garden flat in Marlborough in August 2004. The question was if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparable homes in Marlborough with 100 year plus lease were in the region of £240,600. The average amount of ground rent was £60 billed yearly. The lease ran out in 2088. Taking into account 62 years remaining we calculated the premium to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of costs.
Dr Lily Khan was assigned a lease of a first floor flat in Marlborough in May 2004. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by a further 90 years. Comparative properties in Marlborough with 100 year plus lease were valued around £174,200. The average ground rent payable was £55 billed quarterly. The lease terminated on 19 June 2077. Considering the 51 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of costs.