When it comes to domestic leasehold premises in Welton, you are actually purchasing an entitlement to reside in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may 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 increases markedly particularly when there are fewer than 80 years remaining. Leasehold owners in Welton with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. Once the lease term has below 80 years outstanding, under the current Act the freeholder can calculate and demand a greater premium, based on a technical multiplication, known as “marriage value” which is due.
Leasehold properties in Welton with more than 100 years unexpired on the lease are often 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 reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a landlord in Welton,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Welton valuers.
Hugo owned a conversion flat in Welton on the market with a lease of fraction over 61 years left. Hugo on an informal basis contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder 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 £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Hugo to invoke his statutory right. Hugo obtained expert advice and was able to make an informed judgement and deal with the matter and sell the property.
Last Winter we were e-mailed by Mr Adam Walker , who completed a first floor apartment in Welton in September 2005. The question was if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Identical residencies in Welton with a long lease were worth £168,800. The mid-range ground rent payable was £60 billed monthly. The lease lapsed on 26 June 2081. Taking into account 55 years as a residual term we calculated the premium to the landlord for the lease extension to be between £31,400 and £36,200 not including fees.
Ms Katherine Watson bought a one bedroom flat in Welton in June 2006. We are asked if we could approximate the price could be to prolong the lease by ninety years. Similar homes in Welton with an extended lease were worth £235,200. The average amount of ground rent was £45 invoiced per annum. The lease finished in 2092. Given that there were 66 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus expenses.