When it comes to residential leasehold premises in Marlborough, you are in fact renting it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than eighty years left. Residents in Marlborough with a lease drawing near to 81 years remaining should seriously consider extending it sooner than later. When a lease has less than 80 years outstanding, under the relevant legislation the freeholder can calculate and levy a greater premium, assessed on a technical multiplication, known as “marriage value” which is payable.
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Retaining our service gives you better control over the value of your Marlborough leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Sebastian owned a conversion apartment in Marlborough being sold with a lease of fraction over 61 years unexpired. Sebastian on an informal basis approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Sebastian to invoke his statutory right. Sebastian obtained expert legal guidance and secured satisfactory deal informally and sell the flat.
Last Autumn we were approach by Mr Y Martinez , who moved into a one bedroom flat in Marlborough in September 1998. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar premises in Marlborough with a long lease were in the region of £250,400. The mid-range ground rent payable was £65 invoiced yearly. The lease end date was on 25 February 2089. Taking into account 64 years unexpired we approximated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 not including expenses.
In 2014 we were contacted by Mr and Mrs. V Simon who, having took over the lease of a newly refurbished flat in Marlborough in August 1996. The question was if we could estimate the premium could be for a 90 year lease extension. Comparative flats in Marlborough with 100 year plus lease were valued around £189,000. The average amount of ground rent was £55 collected monthly. The lease came to a finish in 2078. Considering the 53 years unexpired we approximated the premium to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of legals.