When it comes to long leasehold premises in Netherley, you are actually purchasing an entitlement to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater especially once there are fewer than eighty years left. Anyone in Netherley with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has less than 80 years outstanding, under the relevant Act the landlord is entitled to calculate and demand a larger premium, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for many years ahead.
| 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 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Netherley,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Netherley valuers.
During the course of the last few months Owen, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Netherley. Having purchased his property twenty years previously, the unexpired term was of minimal interest. Luckily, he became aware that he would soon be paying an escalated premium for a lease extension. Owen extended the lease just under the wire last July. Owen and the freeholder via the managing agents ultimately settled on an amount of £5,500 . If he not met the deadline, the price would have escalated by at least £1,150.
Mr P Wood moved into a recently refurbished flat in Netherley in May 1996. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable homes in Netherley with an extended lease were worth £166,800. The average amount of ground rent was £50 collected monthly. The lease elapsed on 3 March 2075. Given that there were 50 years left we calculated the compensation to the freeholder to extend the lease to be between £32,300 and £37,400 exclusive of costs.
Last month we were approach by Mrs Ellen Mason , who bought a first floor flat in Netherley in June 1999. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar properties in Netherley with an extended lease were valued around £280,000. The average ground rent payable was £45 invoiced monthly. The lease ran out in 2095. Having 70 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.