When it comes to residential leasehold premises in Ravensthorpe, you are actually buying an entitlement to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than 80 years left. Residents in Ravensthorpe with a lease nearing 81 years remaining should seriously think of extending it sooner rather than later. When a lease has under eighty years left, under the relevant Act the landlord is entitled to calculate and levy a greater premium, assessed on a technical computation, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Ravensthorpe 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.
Milo owned a conversion flat in Ravensthorpe on the market with a lease of a little over 59 years unexpired. Milo informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Milo to invoke his statutory right. Milo obtained expert legal guidance and secured an acceptable deal without going to tribunal and readily saleable.
In 2012 we were e-mailed by Dr Owen Morgan who, having moved into a garden apartment in Ravensthorpe in January 2002. We are asked if we could estimate the price could be for a 90 year lease extension. Similar residencies in Ravensthorpe with an extended lease were worth £233,200. The mid-range amount of ground rent was £60 collected monthly. The lease ended on 27 November 2086. Given that there were 61 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £22,800 and £26,400 plus fees.
Last Winter we were called by Mr Ben Girard , who moved into a one bedroom flat in Ravensthorpe in July 2000. The question was if we could estimate the price would likely be for a ninety year lease extension. Similar homes in Ravensthorpe with an extended lease were worth £171,800. The average amount of ground rent was £55 billed every twelve months. The lease ended in 2075. Having 50 years left we estimated the premium to the landlord to extend the lease to be between £33,300 and £38,400 not including fees.