With a residential leasehold premises in The Meadows, you effectively rent it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease 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 eighty years left. Leasehold owners in The Meadows with a lease approaching 81 years left should seriously think of extending it without delay. When the lease term has below eighty years remaining, under the relevant legislation the freeholder can calculate and levy a greater amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold premises in The Meadows with over 100 years unexpired 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 to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you increased control over the value of your The Meadows leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted correspondence with the freeholder of her two bedroom flat in The Meadows, Rosie commenced the lease extension process as the 80 year deadline was fast advancing. The legal work completed in June 2007. The freeholder’s fees were kept to an absolute minimum.
Dr F Baker owned a first floor flat in The Meadows in August 2008. The question was if we could estimate the premium would be for a 90 year extension to my lease. Comparative premises in The Meadows with 100 year plus lease were valued around £280,000. The average amount of ground rent was £45 collected annually. The lease lapsed on 19 January 2095. Taking into account 70 years remaining we estimated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including legals.
Last Autumn we were phoned by Mr E Mason , who bought a basement apartment in The Meadows in January 2012. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by an additional years. Identical premises in The Meadows with 100 year plus lease were valued around £223,400. The average ground rent payable was £60 collected annually. The lease concluded in 2084. Having 59 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £27,600 and £31,800 plus professional charges.