When it comes to residential leasehold premises in Northam, you are actually buying an entitlement to live in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should 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 particularly when there are less than 80 years remaining. Anyone in Northam with a lease nearing 81 years remaining should seriously think of extending it sooner than later. Once the lease term has under eighty years left, under the relevant statute the landlord is entitled to calculate and charge a larger premium, based on a technical computation, known as “marriage value” which is due.
Leasehold properties in Northam with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Northam can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Northam lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
16 months ago Archie, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Northam. Having purchased his flat 18 years ago, the lease term was of no concern. Thankfully, it dawned on him that he needed to take steps soon on Extending the lease. Archie extended the lease just in the nick of time last January. Archie and the landlord eventually settled on sum of £5,500 . If the lease had dropped to less than 80 years, the amount would have gone up by a minimum £950.
Last Christmas we were called by Mr Liam Bell , who completed a one bedroom flat in Northam in January 2011. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparative premises in Northam with 100 year plus lease were in the region of £285,000. The average ground rent payable was £55 invoiced yearly. The lease ended in 2104. Given that there were 79 years left we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus professional charges.
In 2013 we were approached by Mr John Flores who, having took over the lease of a one bedroom flat in Northam in August 2009. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Comparative properties in Northam with an extended lease were worth £193,400. The average amount of ground rent was £65 billed quarterly. The lease ran out on 4 July 2084. Taking into account 59 years outstanding we approximated the premium to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of professional charges.