Marlow leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Marlow enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Marlow you must investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 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 Marlow with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying 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; |
| 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. |
| Coventry Building Society | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a landlord in Marlow,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Marlow valuers.
Aarav was the the leasehold proprietor of a conversion flat in Marlow on the market with a lease of just over 59 years unexpired. Aarav on an informal basis contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Aarav to invoke his statutory right. Aarav procured expert advice and was able to make a more informed decision and deal with the matter and sell the property.
Mr and Mrs. M Brooks owned a one bedroom apartment in Marlow in May 1995. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparative flats in Marlow with an extended lease were in the region of £173,800. The mid-range ground rent payable was £60 collected every twelve months. The lease concluded on 25 April 2080. Given that there were 55 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 not including expenses.
In 2013 we were phoned by Mr and Mrs. Y François who, having moved into a ground floor apartment in Marlow in July 2000. The question was if we could approximate the premium would be to extend the lease by an additional years. Comparable homes in Marlow with an extended lease were valued around £235,200. The average ground rent payable was £45 collected every twelve months. The lease finished on 27 November 2091. Taking into account 66 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including professional charges.