With a domestic leasehold premises in Rendlesham, you are actually buying an entitlement to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are fewer than eighty years left. Anyone in Rendlesham with a lease drawing near to 81 years left should seriously consider extending it without delay. When a lease has below eighty years left, under the relevant legislation the landlord can calculate and levy a larger amount, based on a technical computation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Rendlesham 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 Muhammad, came critically near to the 80-year threshold with the lease on his one bedroom apartment in Rendlesham. Having bought his property twenty years previously, the length of the lease was of minimal importance. Luckily, he became aware that he needed to take action soon on Extending the lease. Muhammad extended the lease just ahead of time last June. Muhammad and the landlord who owned the flat above in the end agreed on an amount of £5,000 . If he had missed the deadline, the sum would have increased by at least £975.
In 2013 we were phoned by Mr K Turner who, having acquired a basement apartment in Rendlesham in November 1996. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Identical flats in Rendlesham with a long lease were valued around £181,600. The mid-range ground rent payable was £55 invoiced every twelve months. The lease expired on 15 January 2077. Having 52 years remaining we approximated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 plus legals.
Ms Y Nelson was assigned a lease of a first floor flat in Rendlesham in June 2004. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar residencies in Rendlesham with a long lease were worth £290,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease terminated on 1 June 2097. Taking into account 72 years as a residual term we approximated the premium to the landlord for the lease extension to be within £11,400 and £13,200 plus costs.