With a residential leasehold premises in Montgomery, you effectively rent it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately greater particularly when there are fewer than eighty years left. Residents in Montgomery with a lease drawing near to 81 years unexpired should seriously think of extending it without delay. Once the lease term has less than eighty years remaining, under the relevant statute the freeholder is entitled to calculate and charge a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Montgomery,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Montgomery valuers.
Leo was the the leasehold owner of a studio apartment in Montgomery on the market with a lease of a few days over 72 years left. Leo informally spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 yearly. No ground rent would be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Ms Hollie Robinson completed a ground floor flat in Montgomery in July 2002. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Comparative properties in Montgomery with an extended lease were in the region of £256,600. The average amount of ground rent was £60 billed per annum. The lease finished in 2078. Taking into account 52 years outstanding we calculated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 exclusive of expenses.
In 2011 we were approached by Mr and Mrs. B Rivera who, having acquired a garden apartment in Montgomery in September 2004. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Similar homes in Montgomery with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease concluded in 2089. Given that there were 63 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £17,100 and £19,800 exclusive of legals.