Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Altrincham. Clearly, the period of lease left shortens over time. This is often ignored and only raises itself as an issue when the property needs to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Eligible long lease owners in Altrincham have the right to extend the lease for a further 90 years in accordance with Leasehold Reform legislation. You should give careful attention before delaying your Altrincham lease extension. Holding off the cost now simply increases the price you will eventually incur to extend your lease
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Altrincham,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Altrincham valuers.
Last year Harrison, started to get close to the eighty-year threshold with the lease on his basement flat in Altrincham. In buying his home 18 years previously, the lease term was of minimal relevance. Thankfully, he became aware that he would soon be paying an escalated premium for a lease extension. Harrison arranged for a lease extension just in the nick of time in April. Harrison and the landlord in the end settled on a premium of £6,000 . If the lease had dropped lower than 80 years, the figure would have gone up by at least £850.
Last Christmas we were phoned by Mr Cameron Davies , who completed a purpose-built flat in Altrincham in October 2004. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical properties in Altrincham with a long lease were in the region of £205,000. The mid-range ground rent payable was £50 collected annually. The lease came to a finish on 13 July 2104. Having 79 years unexpired we approximated the premium to the freeholder for the lease extension to be between £7,600 and £8,800 plus expenses.
Last year we were approach by Dr V André , who took over the lease of a purpose-built flat in Altrincham in October 2000. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by a further 90 years. Identical flats in Altrincham with an extended lease were valued around £270,000. The mid-range ground rent payable was £65 billed every twelve months. The lease expired on 13 February 2093. Given that there were 68 years remaining we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of fees.