When it comes to long leasehold premises in Storrington, you effectively rent it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are less than eighty years left. Residents in Storrington with a lease drawing near to 81 years remaining should seriously consider extending it sooner than later. When the lease term has fewer than eighty years outstanding, under the relevant Act the freeholder is entitled to calculate and levy a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you better control over the value of your Storrington leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jasper owned a studio apartment in Storrington on the market with a lease of a few days over 61 years outstanding. Jasper on an informal basis spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were Jasper to exercise his statutory right. Jasper obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the property.
Last month we were contacted by Mr and Mrs. C Scott , who acquired a one bedroom apartment in Storrington in January 2006. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Identical residencies in Storrington with an extended lease were valued about £200,000. The mid-range amount of ground rent was £50 collected yearly. The lease end date was on 2 August 2102. Taking into account 77 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus costs.
Dr Aarav Davies acquired a purpose-built flat in Storrington in August 2005. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Similar properties in Storrington with 100 year plus lease were worth £260,200. The average ground rent payable was £65 billed quarterly. The lease ran out in 2091. Given that there were 66 years left we estimated the compensation to the freeholder for the lease extension to be between £16,200 and £18,600 exclusive of costs.