With a residential leasehold premises in Coleford, you are actually buying a right to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years remaining. Leasehold owners in Coleford with a lease drawing near to 81 years left should seriously think of extending it sooner rather than later. When a lease has below 80 years remaining, under the current Act the landlord can calculate and charge a larger amount, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold properties in Coleford with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Engaging our service gives you enhanced control over the value of your Coleford leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Noah owned a 2 bedroom flat in Coleford being marketed with a lease of fraction over fifty eight years unexpired. Noah on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Noah to exercise his statutory right. Noah obtained expert advice and secured an acceptable deal informally and readily saleable.
Mrs Jade Ward moved into a one bedroom flat in Coleford in November 2005. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparable flats in Coleford with a long lease were worth £181,600. The mid-range amount of ground rent was £55 billed annually. The lease terminated on 25 November 2077. Considering the 52 years as a residual term we approximated the premium to the landlord to extend the lease to be within £30,400 and £35,200 not including expenses.
In 2013 we were called by Mr M Pérez who, having purchased a ground floor flat in Coleford in January 2009. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparative homes in Coleford with an extended lease were valued about £285,000. The mid-range ground rent payable was £45 billed quarterly. The lease expiry date was on 1 August 2097. Given that there were 72 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of legals.