With a long leasehold premises in Mexborough and Swinton, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially once there are less than 80 years remaining. Residents in Mexborough and Swinton with a lease approaching 81 years unexpired should seriously consider extending it without delay. Once the lease term has less than 80 years remaining, under the relevant statute the landlord can calculate and demand a greater premium, based on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold residencies in Mexborough and Swinton with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | 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. |
The conveyancers that we work with handle Mexborough and Swinton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Off the back of unsuccessful negotiations with the landlord of her ground floor flat in Mexborough and Swinton, Tia started the lease extension process as the 80 year mark was quickly advancing. The lease extension was concluded in October 2015. The freeholder’s costs were kept to an absolute minimum.
Last Autumn we were approach by Dr Harrison Ali , who owned a ground floor flat in Mexborough and Swinton in June 2001. The dilemma was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Similar premises in Mexborough and Swinton with an extended lease were valued about £285,000. The mid-range ground rent payable was £45 billed yearly. The lease finished on 25 May 2096. Considering the 71 years outstanding we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus expenses.
Last Spring we were called by Mr and Mrs. N Young , who owned a purpose-built apartment in Mexborough and Swinton in March 2002. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable premises in Mexborough and Swinton with a long lease were in the region of £225,800. The mid-range ground rent payable was £60 invoiced annually. The lease came to a finish in 2085. Given that there were 60 years unexpired we estimated the premium to the freeholder to extend the lease to be within £23,800 and £27,400 not including fees.