There is no doubt about it a leasehold flat or house in Baguley is a wasting asset as a result of the diminishing lease term. If the residual term has, beyond 125 years remaining then this decrease may be fractional however there will become a stage when a lease has less than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the primary rational as to why you should consider extending without delay. The majority of flat owners in Baguley will qualify for this right; nevertheless a conveyancer should be able to advise whether you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold properties in Baguley with over 100 years unexpired 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 premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate 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 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancing solicitors that we work with procure 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 lawyer we work with provide it.
Aarav owned a high value apartment in Baguley being sold with a lease of a few days over 59 years unexpired. Aarav on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Aarav to exercise his statutory right. Aarav procured expert legal guidance and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2014 we were called by Mr and Mrs. M Garcia who, having owned a studio flat in Baguley in May 2000. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Comparable flats in Baguley with 100 year plus lease were worth £233,200. The average ground rent payable was £60 billed per annum. The lease expiry date was in 2087. Taking into account 61 years remaining we approximated the compensation to the landlord to extend the lease to be between £22,800 and £26,400 not including costs.
Mr Teddy Hill acquired a ground floor apartment in Baguley in March 2004. The dilemma was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Comparable flats in Baguley with a long lease were worth £166,800. The mid-range ground rent payable was £50 billed monthly. The lease lapsed in 2076. Given that there were 50 years unexpired we approximated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 exclusive of fees.