When it comes to long leasehold property in Southwell, you are in fact renting it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than eighty years remaining. Residents in Southwell with a lease nearing 81 years left should seriously consider extending it as soon as possible. When the lease term has below eighty years remaining, under the current legislation the landlord is entitled to calculate and charge a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Engaging our service will provide you better control over the value of your Southwell leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After protracted negotiations with the freeholder of her leasehold apartment in Southwell, Ellen commenced the lease extension process as the eighty year mark was swiftly approaching. The transaction was finalised in September 2014. The freeholder’s charges were kept to an absolute minimum.
Last month we were called by Mr and Mrs. G Stewart , who moved into a studio apartment in Southwell in February 2005. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar premises in Southwell with an extended lease were worth £275,000. The average amount of ground rent was £55 invoiced monthly. The lease terminated on 7 June 2101. Considering the 76 years left we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.
In 2011 we were contacted by Mr and Mrs. W Morris who, having owned a one bedroom apartment in Southwell in May 2005. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical residencies in Southwell with a long lease were in the region of £176,200. The average amount of ground rent was £65 billed per annum. The lease terminated in 2081. Having 56 years remaining we calculated the compensation to the freeholder for the lease extension to be within £29,500 and £34,000 exclusive of professional charges.