With a domestic leasehold premises in Paulton, you are actually buying a right to reside in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are fewer than eighty years left. Leasehold owners in Paulton with a lease approaching 81 years remaining should seriously consider extending it without delay. Once the lease term has fewer than 80 years left, under the current legislation the landlord is entitled to calculate and charge a larger amount, assessed on a technical multiplication, known as “marriage value” which is due.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Paulton leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Thomas owned a high value flat in Paulton on the market with a lease of just over 72 years remaining. Thomas informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £200 annually. Ordinarily, ground rent would not be due on a lease extension were Thomas to invoke his statutory right. Thomas obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
In 2013 we were phoned by Mr A Gray who, having completed a basement flat in Paulton in March 2005. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparative homes in Paulton with a long lease were valued around £285,000. The mid-range ground rent payable was £55 billed per annum. The lease ended in 2106. Considering the 80 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including fees.
Mr and Mrs. L Lefèvre completed a ground floor flat in Paulton in March 2007. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Comparable properties in Paulton with an extended lease were valued about £200,800. The average amount of ground rent was £65 billed yearly. The lease elapsed in 2086. Taking into account 60 years unexpired we approximated the premium to the landlord for the lease extension to be within £20,900 and £24,200 exclusive of professional charges.