When it comes to long leasehold property in Preston, you are actually buying an entitlement to live in a property for a set period of time. In recent years 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 may think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly once there are less than eighty years remaining. Residents in Preston with a lease approaching 81 years left should seriously think of extending it without delay. Once a lease has under 80 years left, under the current Act the landlord is entitled to calculate and demand a greater premium, assessed on a technical computation, known as “marriage value” which is due.
Leasehold properties in Preston with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| 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; |
| 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. |
The lawyers that we work with procure Preston lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Last October Finn, started to get near to the eighty-year mark with the lease on his ground floor flat in Preston. Having bought his home two decades ago, the unexpired term was of little concern. As luck would have it, he realised he needed to take steps soon on Extending the lease. Finn arranged for a lease extension just under the wire in May. Finn and the landlord who owned the flat above in the end agreed on an amount of £5,500 . If the lease had descended lower than 80 years, the figure would have increased by a minimum £850.
Dr O King moved into a one bedroom apartment in Preston in May 2002. The dilemma was if we could approximate the price could be to prolong the lease by 90 years. Identical premises in Preston with 100 year plus lease were in the region of £203,200. The mid-range ground rent payable was £65 collected yearly. The lease terminated in 2086. Taking into account 61 years left we estimated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 not including costs.
An example of a Lease Extension matter before the tribunal for a Preston property is Ground Floor Flat 79 London Road in September 2012. the Tribunal held that the premium payable for the lease extension should be £7,636 This case affected 1 flat. The unexpired term was 74 years.