When it comes to residential leasehold property in Strood, 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 long period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than 80 years left. Residents in Strood with a lease drawing near to 81 years left should seriously think of extending it as soon as possible. Once a lease has below 80 years left, under the relevant legislation the landlord can calculate and demand a larger amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in Strood with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with undertake Strood 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 conveyancer we work with provide it.
Hugo was the the leasehold proprietor of a conversion flat in Strood being marketed with a lease of a little over sixty years remaining. Hugo informally contacted his freeholder being a well known Manchester-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 a rise in the rent to £200 per annum. No ground rent would be due on a lease extension were Hugo to exercise his statutory right. Hugo procured expert advice and secured an acceptable resolution informally and readily saleable.
Mr C André acquired a one bedroom apartment in Strood in May 2006. The dilemma was if we could estimate the premium could be to extend the lease by a further 90 years. Identical homes in Strood with 100 year plus lease were valued about £205,000. The average ground rent payable was £50 invoiced annually. The lease ended in 2104. Taking into account 79 years unexpired we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including costs.
Last month we were contacted by Dr K Williams , who moved into a studio apartment in Strood in September 1995. We are asked if we could approximate the premium would be to extend the lease by a further 90 years. Comparable homes in Strood with an extended lease were in the region of £275,000. The average amount of ground rent was £65 billed annually. The lease finished on 17 August 2093. Having 68 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.