The market value of a leasehold property in Atherton depends on how many years the lease has left to run. If it is close to or less than 80 years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is ideal to start the lease extension process when a lease still has 82 years to run so that all matters can be concluded in advance of the 80 year mark. Leasehold Reform legislation enables Atherton qualifying lessees to a 90 year extension added to their residual lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Atherton with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Atherton,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Atherton valuers.
Last October Theo, came very near to the eighty-year threshold with the lease on his one bedroom apartment in Atherton. In buying his property twenty years ago, the unexpired term was of little importance. by good luck, he noticed he would imminently be paying way over the odds for Extending the lease. Theo extended the lease just under the wire in May. Theo and the freeholder via the management company eventually agreed on the final figure of £6,000 . If the lease had gone below eighty years, the amount would have increased by at least £1,075.
Mr and Mrs. B Mercier took over the lease of a studio apartment in Atherton in March 1997. We are asked if we could approximate the premium could be to prolong the lease by an additional years. Comparable residencies in Atherton with a long lease were worth £225,800. The mid-range ground rent payable was £60 collected annually. The lease ran out in 2085. Having 60 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £25,700 and £29,600 exclusive of costs.
In 2010 we were contacted by Mr and Mrs. F Baker who, having moved into a studio flat in Atherton in April 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Comparative flats in Atherton with a long lease were in the region of £210,000. The mid-range amount of ground rent was £50 billed quarterly. The lease ended on 8 April 2105. Considering the 80 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including costs.