For anyone whose Audlem home is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension.
Leasehold properties in Audlem with more than 100 years left 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 property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Using our service will provide you better control over the value of your Audlem leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Hunter owned a studio flat in Audlem being marketed with a lease of a few days over 61 years unexpired. Hunter on an informal basis spoke with his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Hunter to invoke his statutory right. Hunter procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the flat.
In 2013 we were contacted by Mr P Cooper who, having moved into a purpose-built flat in Audlem in March 2009. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Identical homes in Audlem with a long lease were valued around £256,600. The average ground rent payable was £60 invoiced monthly. The lease finished on 8 July 2076. Taking into account 52 years remaining we estimated the compensation to the freeholder to extend the lease to be between £41,800 and £48,400 not including costs.
Mr and Mrs. E Allen bought a one bedroom apartment in Audlem in June 2012. The question was if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparable homes in Audlem with an extended lease were in the region of £218,000. The average ground rent payable was £45 collected every twelve months. The lease terminated in 2087. Taking into account 63 years left we estimated the premium to the landlord to extend the lease to be within £17,100 and £19,800 plus fees.