When it comes to domestic leasehold property in Heathfield, you effectively rent it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are fewer than 80 years left. Leasehold owners in Heathfield with a lease drawing near to 81 years unexpired should seriously think of extending it without delay. When the lease term has below eighty years outstanding, under the current statute the landlord can calculate and charge a larger amount, assessed on a technical computation, known as “marriage value” which is due.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Heathfield lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
In recent months Jason, came very close to the eighty-year threshold with the lease on his studio flat in Heathfield. In buying his flat two decades ago, the length of the lease was of no relevance. As luck would have it, he recognised he would soon be paying way over the odds for a lease extension. Jason was able to extend his lease just in the nick of time last June. Jason and the landlord eventually agreed on the final figure of £5,500 . If he failed to meet the deadline, the figure would have increased by a minimum £975.
Mr C Nelson purchased a recently refurbished apartment in Heathfield in October 2007. The question was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical homes in Heathfield with an extended lease were in the region of £242,600. The average ground rent payable was £45 billed annually. The lease finished in 2093. Having 67 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £11,400 and £13,200 exclusive of expenses.
In 2011 we were contacted by Ms Katherine Wilson who, having moved into a purpose-built flat in Heathfield in October 1997. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative premises in Heathfield with 100 year plus lease were valued around £280,000. The average ground rent payable was £55 collected monthly. The lease termination date was in 2104. Given that there were 78 years unexpired we estimated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of professional charges.