When it comes to residential leasehold premises in Ferryhill, you are actually purchasing an entitlement to reside in a property for a set period 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 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 becomes disproportionately more expensive particularly once there are less than 80 years remaining. Anyone in Ferryhill with a lease approaching 81 years unexpired should seriously consider extending it as soon as possible. Once the lease term has under 80 years outstanding, under the relevant statute the landlord can calculate and levy a larger amount, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold residencies in Ferryhill with over one hundred years outstanding 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 home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 |
The lawyers that we work with handle Ferryhill 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.
After unsuccessful negotiations with the landlord of her studio apartment in Ferryhill, Lily commenced the lease extension process just as the lease was coming close to the critical eighty-year threshold. The lease extension was concluded in August 2007. The landlord’s charges were negotiated to about 700 pounds.
Last Autumn we were phoned by Mr P Dupont , who moved into a recently refurbished apartment in Ferryhill in November 2009. We are asked if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparable properties in Ferryhill with an extended lease were in the region of £223,400. The mid-range amount of ground rent was £60 collected every twelve months. The lease finished in 2085. Given that there were 59 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £27,600 and £31,800 plus expenses.
In 2010 we were called by Mr Leon Gómez who, having bought a first floor apartment in Ferryhill in August 1997. The question was if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Identical premises in Ferryhill with an extended lease were worth £205,000. The average amount of ground rent was £50 billed quarterly. The lease ran out on 8 May 2105. Taking into account 79 years remaining we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.