When it comes to long leasehold property in Cleckheaton, you are in fact renting it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about 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 especially once there are fewer than eighty years remaining. Anyone in Cleckheaton with a lease nearing 81 years left should seriously consider extending it without delay. Once the lease term has under eighty years remaining, under the relevant legislation the landlord can calculate and demand a greater premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold residencies in Cleckheaton with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you enhanced control over the value of your Cleckheaton leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Dylan owned a conversion flat in Cleckheaton being sold with a lease of a few days over fifty eight years remaining. Dylan informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Dylan to invoke his statutory right. Dylan obtained expert legal guidance and secured an acceptable resolution informally and sell the property.
Mr and Mrs. O Lefebvre purchased a basement flat in Cleckheaton in September 2002. The question was if we could estimate the price would likely be for a ninety year lease extension. Comparative homes in Cleckheaton with 100 year plus lease were valued around £205,000. The average amount of ground rent was £50 billed yearly. The lease expired on 28 August 2104. Considering the 79 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus professional charges.
In 2013 we were approached by Mr and Mrs. J Ali who, having was assigned a lease of a first floor apartment in Cleckheaton in September 2000. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Comparable flats in Cleckheaton with an extended lease were in the region of £275,000. The average amount of ground rent was £65 billed quarterly. The lease elapsed in 2093. Given that there were 68 years left we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of legals.