With a domestic leasehold premises in Biddenham, you effectively rent it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably when there are less than eighty years remaining. Anyone in Biddenham with a lease approaching 81 years left should seriously think of extending it sooner than later. Once a lease has less than 80 years left, under the relevant legislation the freeholder is entitled to calculate and levy a greater amount, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold residencies in Biddenham with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you increased control over the value of your Biddenham leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year Joseph, started to get near to the 80-year mark with the lease on his purpose- built flat in Biddenham. Having purchased his property two decades ago, the lease term was of no significance. Luckily, he realised he would soon be paying an escalated premium for a lease extension. Joseph extended the lease just under the wire last July. Joseph and the freeholder subsequently agreed on an amount of £6,000 . If he had missed the deadline, the sum would have increased by a minimum £900.
In 2010 we were phoned by Mrs Natasha André who, having purchased a studio flat in Biddenham in July 1996. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Comparable flats in Biddenham with an extended lease were in the region of £264,000. The average ground rent payable was £60 invoiced monthly. The lease elapsed on 20 February 2077. Having 53 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £37,100 and £42,800 plus expenses.
Mr V Wood owned a basement apartment in Biddenham in November 1997. The question was if we could estimate the premium would be for a 90 year extension to my lease. Comparable premises in Biddenham with an extended lease were valued about £225,400. The mid-range amount of ground rent was £45 invoiced per annum. The lease finished in 2088. Considering the 64 years remaining we approximated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 not including costs.