When it comes to long leasehold premises in Stoke Gifford, you effectively rent it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems 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 gets disproportionately greater particularly once there are less than 80 years left. Anyone in Stoke Gifford with a lease nearing 81 years unexpired should seriously think of extending it without delay. Once the lease term has under eighty years outstanding, under the relevant statute the landlord is entitled to calculate and charge a larger premium, based on a technical computation, strangely termed as “marriage value” which is payable.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 | 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. |
The conveyancers that we work with undertake Stoke Gifford 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.
Two years ago Aiden, came dangerously close to the 80-year mark with the lease on his studio apartment in Stoke Gifford. In buying his property 19 years ago, the length of the lease was of no relevance. Luckily, he recognised he would imminently be paying an escalated premium for a lease extension. Aiden arranged for a lease extension just in the nick of time last April. Aiden and the freeholder subsequently settled on a premium of £5,000 . If the lease had dipped lower than 80 years, the amount would have become more exhorbitant by at least £1,150.
In 2011 we were approached by Mr K Vincent who, having acquired a basement flat in Stoke Gifford in January 2009. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Comparable flats in Stoke Gifford with 100 year plus lease were valued around £260,000. The average ground rent payable was £50 collected per annum. The lease ended on 23 March 2096. Taking into account 71 years as a residual term we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.
Last October we were approach by Dr Maisie Scott , who bought a studio apartment in Stoke Gifford in June 2002. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by a further 90 years. Comparative homes in Stoke Gifford with an extended lease were valued about £254,200. The average ground rent payable was £60 invoiced annually. The lease finished on 27 April 2076. Taking into account 51 years remaining we approximated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 plus expenses.