When it comes to domestic leasehold premises in South Petherton, you effectively rent it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive especially when there are less than eighty years left. Residents in South Petherton with a lease approaching 81 years unexpired should seriously think of extending it sooner than later. When a lease has fewer than eighty years outstanding, under the current legislation the freeholder can calculate and demand a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold residencies in South Petherton with over one hundred years left on the lease are often 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 to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with procure South Petherton 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 conveyancing solicitor we work with provide it.
Jacob owned a high value apartment in South Petherton being sold with a lease of just over sixty years outstanding. Jacob informally spoke with his landlord being 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 an increased rent to £50 yearly. No ground rent would be payable on a lease extension were Jacob to invoke his statutory right. Jacob obtained expert legal guidance and secured satisfactory resolution informally and readily saleable.
Mr and Mrs. V Lambert took over the lease of a newly refurbished apartment in South Petherton in November 2005. We are asked if we could shed any light on how much (approximately) price would be to extend the lease by 90 years. Identical flats in South Petherton with a long lease were in the region of £176,200. The average ground rent payable was £65 collected monthly. The lease end date was in 2081. Taking into account 56 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £29,500 and £34,000 exclusive of legals.
In 2009 we were phoned by Dr Theo Bernard who, having bought a recently refurbished apartment in South Petherton in April 2010. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by ninety years. Comparative residencies in South Petherton with an extended lease were worth £242,600. The mid-range ground rent payable was £45 collected every twelve months. The lease expired on 26 March 2092. Taking into account 67 years as a residual term we approximated the premium to the landlord to extend the lease to be between £11,400 and £13,200 exclusive of professional charges.