For anyone whose Martlesham flat is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension.
Leasehold premises in Martlesham with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Using our service gives you enhanced control over the value of your Martlesham leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Jayden, came critically near to the 80-year mark with the lease on his studio flat in Martlesham. Having purchased his property 19 years ago, the lease term was of minimal concern. Thankfully, he recognised he would soon be paying an escalated premium for a lease extension. Jayden arranged for a lease extension just in the nick of time in September. Jayden and the freeholder via the managing agents in the end settled on the final figure of £5,000 . If the lease had gone lower than 80 years, the sum would have increased by a minimum £900.
In 2009 we were e-mailed by Dr W Evans who, having acquired a purpose-built flat in Martlesham in February 1997. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar properties in Martlesham with a long lease were in the region of £295,000. The mid-range amount of ground rent was £45 billed annually. The lease concluded on 28 August 2100. Having 74 years left we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of fees.
Mr Jasper Allen acquired a studio apartment in Martlesham in September 2005. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical properties in Martlesham with 100 year plus lease were in the region of £248,000. The average amount of ground rent was £65 billed per annum. The lease elapsed in 2089. Considering the 63 years remaining we estimated the premium to the landlord for the lease extension to be between £20,000 and £23,000 not including expenses.