With a residential leasehold premises in South Cave, you effectively rent it for a certain period of time. These days 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 consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than 80 years left. Anyone in South Cave with a lease drawing near to 81 years left should seriously think of extending it without delay. Once the lease term has under eighty years outstanding, under the current Act the freeholder is entitled to calculate and levy a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
It is conventional wisdom 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 ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
Regardless of whether you are a tenant or a freeholder in South Cave,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with South Cave valuers.
In recent months Owen, came dangerously close to the eighty-year threshold with the lease on his purpose- built apartment in South Cave. Having purchased his flat two decades ago, the unexpired term was of little concern. Thankfully, he recognised he would imminently be paying way over the odds for Extending the lease. Owen extended the lease at the eleventh hour in September. Owen and the freeholder via the management company in the end settled on a premium of £6,000 . If he had missed the deadline, the price would have gone up by a minimum £975.
Last Autumn we were approach by Mr Edward Ramírez , who acquired a garden flat in South Cave in October 2003. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Comparable flats in South Cave with a long lease were worth £255,000. The average amount of ground rent was £50 billed quarterly. The lease expired in 2097. Taking into account 71 years remaining we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
Last year we were phoned by Mr and Mrs. W Khan , who completed a one bedroom apartment in South Cave in February 2003. We are asked if we could estimate the premium would be for a ninety year lease extension. Identical residencies in South Cave with an extended lease were valued around £254,200. The mid-range ground rent payable was £60 invoiced per annum. The lease elapsed in 2077. Having 51 years remaining we estimated the premium to the landlord for the lease extension to be within £43,700 and £50,600 plus costs.