Spalding leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Spalding enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Spalding you should check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Spalding with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
The conveyancing solicitors that we work with procure Spalding 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 lawyer we work with provide it.
14 months ago Aiden, came dangerously near to the eighty-year mark with the lease on his two bedroom apartment in Spalding. Having purchased his flat two decades ago, the length of the lease was of no interest. by good luck, he noticed he would imminently be paying way over the odds for Extending the lease. Aiden arranged for a lease extension just ahead of time in May. Aiden and the freeholder via the managing agents subsequently agreed on sum of £6,000 . If he failed to meet the deadline, the price would have become more exhorbitant by at least £1,125.
Last Spring we were e-mailed by Dr Zachary Taylor , who took over the lease of a ground floor flat in Spalding in November 1998. We are asked if we could estimate the premium could be to prolong the lease by ninety years. Comparable premises in Spalding with an extended lease were valued about £223,400. The average amount of ground rent was £60 billed yearly. The lease expired on 12 May 2085. Given that there were 59 years unexpired we estimated the premium to the landlord to extend the lease to be between £27,600 and £31,800 exclusive of legals.
In 2013 we were approached by Mr Logan Scott who, having completed a newly refurbished flat in Spalding in August 2002. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Comparative properties in Spalding with a long lease were valued around £205,000. The average amount of ground rent was £50 invoiced annually. The lease elapsed on 21 July 2105. Considering the 79 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus expenses.