Owning a flat usually means owning a lease of the property, which has a finite term of years. your lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Baguley. Clearly, the length of lease left reduces as time goes by. This may pass by relatively unnoticed when the property has to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Qualifying leaseholders in Baguley have the right to extend the lease for an additional 90 years under legislation. You should give due attention before putting off your Baguley lease extension. Holding off that expense now likely increases the price you will ultimately incur to extend your lease
Leasehold properties in Baguley with more than 100 years left on the lease are sometimes referred to as ‘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 maintenance charges justify 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with undertake Baguley 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 conveyancer we work with provide it.
Max owned a 2 bedroom apartment in Baguley on the market with a lease of fraction over fifty eight years outstanding. Max on an informal basis approached his landlord being a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. No ground rent would be payable on a lease extension were Max to exercise his statutory right. Max obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the flat.
Ms W Simon moved into a first floor apartment in Baguley in January 2007. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable properties in Baguley with 100 year plus lease were in the region of £218,400. The mid-range amount of ground rent was £60 collected every twelve months. The lease expired on 16 January 2085. Considering the 59 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 not including costs.
Last Winter we were called by Mr and Mrs. P Allen , who took over the lease of a purpose-built flat in Baguley in July 2009. We are asked if we could estimate the price would likely be for a 90 year lease extension. Identical residencies in Baguley with a long lease were worth £205,000. The average ground rent payable was £50 invoiced yearly. The lease came to a finish in 2105. Taking into account 79 years outstanding we calculated the premium to the landlord to extend the lease to be between £7,600 and £8,800 not including legals.