When it comes to domestic leasehold property in Baguley, you are actually purchasing an entitlement to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably when there are less than eighty years remaining. Anyone in Baguley with a lease approaching 81 years left should seriously think of extending it without delay. Once the lease term has below eighty years left, under the relevant statute the landlord is entitled to calculate and charge a larger amount, based on a technical multiplication, known as “marriage value” which is payable.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
Using our service gives you increased control over the value of your Baguley leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter David, started to get near to the eighty-year threshold with the lease on his two bedroom flat in Baguley. In buying his flat two decades ago, the lease term was of no bearing. Fortunately, he became aware that he would soon be paying way over the odds for a lease extension. David was able to extend his lease just ahead of time in September. David and the landlord in the end settled on a premium of £5,500 . If he had missed the deadline, the figure would have gone up by at least £1,075.
In 2010 we were phoned by Mr A Torres who, having took over the lease of a studio apartment in Baguley in November 2011. We are asked if we could estimate the price would be to extend the lease by ninety years. Comparative properties in Baguley with an extended lease were in the region of £181,600. The average ground rent payable was £55 billed yearly. The lease expired on 17 September 2078. Given that there were 52 years left we estimated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 exclusive of legals.
In 2012 we were approached by Mr and Mrs. J García who, having took over the lease of a newly refurbished apartment in Baguley in March 2004. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Identical homes in Baguley with an extended lease were valued about £285,000. The average ground rent payable was £45 collected quarterly. The lease finished on 16 November 2098. Given that there were 72 years remaining we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.