When it comes to domestic leasehold premises in Sewardstonebury, 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. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are less than 80 years remaining. Leasehold owners in Sewardstonebury with a lease nearing 81 years unexpired should seriously consider extending it sooner rather than later. Once the lease term has less than 80 years remaining, under the current Act the freeholder is entitled to calculate and charge a larger amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold premises in Sewardstonebury with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Using our service gives you better control over the value of your Sewardstonebury leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Oliver, started to get close to the 80-year mark with the lease on his two bedroom apartment in Sewardstonebury. Having purchased his flat two decades ago, the lease term was of no bearing. by good luck, it dawned on him that he would soon be paying way over the odds for a lease extension. Oliver arranged for a lease extension at the eleventh hour in July. Oliver and the freeholder via the managing agents eventually agreed on the final figure of £5,500 . If he had missed the deadline, the amount would have become more costly by a minimum £1,100.
In 2011 we were phoned by Dr Andrew Rose who, having owned a ground floor flat in Sewardstonebury in September 2007. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by ninety years. Comparative homes in Sewardstonebury with a long lease were valued about £166,400. The average ground rent payable was £60 invoiced quarterly. The lease expired in 2079. Taking into account 54 years left we estimated the compensation to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of fees.
In 2013 we were phoned by Dr Natasha Nguyen who, having completed a studio flat in Sewardstonebury in September 2004. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Similar premises in Sewardstonebury with a long lease were valued around £232,800. The average amount of ground rent was £45 invoiced quarterly. The lease expiry date was in 2090. Considering the 65 years outstanding we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus costs.