With a residential leasehold property in Petworth, you are actually purchasing an entitlement to live in a property for a prescribed time frame. These days 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 rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly especially once there are less than eighty years remaining. Residents in Petworth with a lease nearing 81 years left should seriously consider extending it without delay. When the lease term has below 80 years remaining, under the relevant Act the freeholder can calculate and levy a larger premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you enhanced control over the value of your Petworth leasehold, as your property will be more valuable and saleable in relation to the 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.
Off the back of protracted discussions with the freeholder of her leasehold flat in Petworth, Hannah started the lease extension process just as the lease was approaching the crucial eighty-year deadline. The transaction was concluded in January 2007. The freeholder’s fees were restricted to approximately six hundred GBP.
In 2009 we were contacted by Mr and Mrs. N Gunderson who, having bought a first floor flat in Petworth in February 2004. We are asked if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Identical flats in Petworth with a long lease were valued around £184,000. The mid-range amount of ground rent was £55 collected quarterly. The lease elapsed on 12 August 2078. Considering the 53 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including expenses.
In 2011 we were e-mailed by Dr David Miller who, having took over the lease of a recently refurbished flat in Petworth in January 2010. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Identical premises in Petworth with a long lease were worth £290,000. The mid-range ground rent payable was £45 billed annually. The lease elapsed in 2098. Taking into account 73 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including professional charges.