With a domestic leasehold premises in Elm Park, you are actually purchasing a right to reside in a property for a set period 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 may consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater particularly once there are fewer than 80 years left. Residents in Elm Park with a lease drawing near to 81 years remaining should seriously consider extending it sooner than later. Once a lease has below eighty years left, under the relevant Act the freeholder is entitled to calculate and levy a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold premises in Elm Park with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Elm Park,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Elm Park valuers.
Seth owned a high value flat in Elm Park being marketed with a lease of just over 59 years remaining. Seth informally contacted his landlord being a well known local-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. No ground rent would be payable on a lease extension were Seth to invoke his statutory right. Seth procured expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
Last October we were called by Mr and Mrs. F Smith , who bought a recently refurbished apartment in Elm Park in November 2000. The dilemma was if we could estimate the premium would likely be to extend the lease by an additional years. Comparative flats in Elm Park with a long lease were worth £260,000. The average amount of ground rent was £50 collected yearly. The lease end date was in 2097. Given that there were 72 years remaining we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.
An example of a Lease Extension decision for a Elm Park property is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case was in relation to 1 flat. The unexpired term as at the valuation date was 57.5 years.