With a long leasehold premises in Shenley Church End, you effectively rent it for a certain 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 should 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 eighty years remaining. Leasehold owners in Shenley Church End with a lease approaching 81 years unexpired should seriously consider extending it as soon as possible. Once a lease has fewer than eighty years outstanding, under the relevant Act the freeholder is entitled to calculate and charge a larger premium, assessed on a technical calculation, known as “marriage value” which is due.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 will provide you increased control over the value of your Shenley Church End leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Michael owned a studio flat in Shenley Church End being sold with a lease of a little over 61 years remaining. Michael informally contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Michael to exercise his statutory right. Michael obtained expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2011 we were contacted by Mr and Mrs. Y Bennett who, having moved into a newly refurbished flat in Shenley Church End in September 2012. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar flats in Shenley Church End with an extended lease were valued about £189,000. The average amount of ground rent was £55 collected quarterly. The lease termination date was in 2078. Having 53 years remaining we calculated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 not including expenses.
In 2012 we were called by Dr Rebecca Bonnet who, having bought a newly refurbished flat in Shenley Church End in November 2003. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparable homes in Shenley Church End with 100 year plus lease were valued around £290,000. The average amount of ground rent was £45 invoiced yearly. The lease finished in 2098. Having 73 years left we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of expenses.