Toddington 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 becomes more expensive. It is the case that most Toddington tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Toddington you really ought to see if your lease has between 70 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 part of the premium you pay is what is known as a marriage value
Leasehold residencies in Toddington with more than one hundred years remaining 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 situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure Toddington 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.
Isaac owned a high value flat in Toddington on the market with a lease of just over fifty eight years unexpired. Isaac informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Isaac to exercise his statutory right. Isaac obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Dr Toby Dupont purchased a basement flat in Toddington in May 2002. We are asked if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Comparable premises in Toddington with a long lease were worth £218,000. The average amount of ground rent was £45 billed per annum. The lease concluded in 2089. Considering the 63 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 not including fees.
In 2010 we were called by Mr A Alexander who, having was assigned a lease of a ground floor apartment in Toddington in April 2010. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar properties in Toddington with 100 year plus lease were worth £265,000. The average amount of ground rent was £50 invoiced quarterly. The lease terminated on 6 May 2100. Taking into account 74 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus costs.