When it comes to long leasehold premises in Handforth, you are in fact renting 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 consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably once there are fewer than eighty years left. Leasehold owners in Handforth with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once the lease term has fewer than 80 years outstanding, under the current Act the freeholder can calculate and levy a greater premium, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| Coventry Building Society | 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. |
| Halifax | 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 |
Regardless of whether you are a tenant or a freeholder in Handforth,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Handforth valuers.
After unsuccessful discussions with the freeholder of her ground floor flat in Handforth, Eleanor commenced the lease extension process just as the lease was approaching the crucial 80-year mark. The transaction was concluded in August 2013. The freeholder’s charges were negotiated to a tad over 500 GBP.
Last Winter we were contacted by Mr and Mrs. V Davis , who acquired a purpose-built flat in Handforth in November 2006. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar premises in Handforth with an extended lease were in the region of £300,000. The mid-range amount of ground rent was £50 invoiced annually. The lease came to a finish in 2101. Taking into account 76 years remaining we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including fees.
In 2010 we were contacted by Mr F Stewart who, having purchased a studio flat in Handforth in August 2004. The dilemma was if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Identical premises in Handforth with 100 year plus lease were worth £257,800. The average ground rent payable was £65 invoiced annually. The lease concluded on 2 January 2090. Considering the 65 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 exclusive of professional charges.