Baguley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Baguley tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Baguley you really ought to investigate if your lease has between 70 and 90 years left. There are good reasons why a Baguley leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is actioned without delay
Leasehold properties in Baguley with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| 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. |
| 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 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Baguley can be a difficult process. We recommend you get professional help from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Baguley lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Felix, came critically near to the eighty-year mark with the lease on his purpose- built flat in Baguley. In buying his flat two decades ago, the unexpired term was of no importance. by good luck, he noticed he needed to take steps soon on a lease extension. Felix was able to extend his lease at the eleventh hour in August. Felix and the landlord who owned the flat above ultimately settled on an amount of £6,000 . If he not met the deadline, the amount would have gone up by a minimum £1,050.
Last Summer we were contacted by Mr and Mrs. E Davies , who completed a first floor apartment in Baguley in June 2006. We are asked if we could approximate the price could be for a ninety year extension to my lease. Comparative flats in Baguley with 100 year plus lease were worth £205,000. The average ground rent payable was £50 invoiced monthly. The lease terminated in 2105. Having 79 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £7,600 and £8,800 exclusive of expenses.
In 2009 we were phoned by Mr and Mrs. T Carter who, having acquired a purpose-built apartment in Baguley in February 1999. The dilemma was if we could estimate the price would likely be to prolong the lease by 90 years. Comparative premises in Baguley with 100 year plus lease were valued about £275,000. The average amount of ground rent was £65 collected monthly. The lease elapsed on 19 August 2094. Taking into account 68 years left we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus expenses.