With a domestic leasehold property in Harrold, you are actually purchasing a right to live in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are less than eighty years left. Leasehold owners in Harrold with a lease drawing near to 81 years remaining should seriously think of extending it without delay. Once the lease term has below eighty years left, under the relevant legislation the landlord is entitled to calculate and charge a larger premium, based on a technical computation, known as “marriage value” which is due.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 better control over the value of your Harrold leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jayden owned a conversion flat in Harrold on the market with a lease of just over fifty eight years left. Jayden on an informal basis approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £200 per annum. No ground rent would be due on a lease extension were Jayden to exercise his statutory right. Jayden procured expert legal guidance and secured satisfactory deal without resorting to tribunal and sell the property.
Dr Freddie Miller acquired a basement apartment in Harrold in January 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Similar properties in Harrold with a long lease were worth £264,000. The mid-range amount of ground rent was £60 billed monthly. The lease ended on 4 April 2078. Taking into account 53 years left we estimated the premium to the freeholder to extend the lease to be between £37,100 and £42,800 exclusive of fees.
Dr F Campbell moved into a one bedroom flat in Harrold in February 2012. The question was if we could approximate the premium could be to extend the lease by a further 90 years. Similar residencies in Harrold with 100 year plus lease were valued around £220,400. The average amount of ground rent was £45 invoiced every twelve months. The lease lapsed in 2089. Given that there were 64 years remaining we calculated the compensation to the landlord for the lease extension to be between £16,200 and £18,600 not including legals.