When it comes to domestic leasehold premises in Reading, you are in fact renting it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may 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 becomes disproportionately greater particularly once there are fewer than eighty years left. Residents in Reading with a lease nearing 81 years left should seriously think of extending it as soon as possible. Once a lease has below eighty years remaining, under the current Act the landlord is entitled to calculate and charge a larger amount, assessed on a technical calculation, known as “marriage value” which is payable.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Lease extensions in Reading can be a difficult process. We recommend you obtain guidance from a lawyer 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 in-depth market knowledge dealing with Reading lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Ollie, started to get close to the 80-year threshold with the lease on his ground floor apartment in Reading. In buying his property two decades ago, the lease term was of no significance. Thankfully, he realised he would imminently be paying an escalated premium for a lease extension. Ollie extended the lease just ahead of time in March. Ollie and the landlord who owned the flat above in the end settled on a premium of £5,000 . If the lease had dipped to less than eighty years, the sum would have increased by at least £850.
Mr J Norbert took over the lease of a one bedroom flat in Reading in January 2000. We are asked if we could estimate the price would likely be to extend the lease by an additional years. Similar homes in Reading with an extended lease were worth £285,000. The mid-range ground rent payable was £45 collected annually. The lease terminated on 16 October 2097. Having 71 years left we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus expenses.
In 2014 we were approached by Dr Y Howard who, having owned a one bedroom flat in Reading in September 2002. The question was if we could estimate the price could be to extend the lease by ninety years. Comparative homes in Reading with an extended lease were valued around £225,800. The average amount of ground rent was £60 invoiced per annum. The lease ran out on 15 February 2086. Taking into account 60 years left we estimated the compensation to the landlord for the lease extension to be within £23,800 and £27,400 exclusive of expenses.