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 gets more expensive. It is the case that most Baguley tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Baguley you really ought to see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Baguley with over one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle 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 conveyancing solicitor we work with provide it.
After protracted negotiations with the landlord of her two bedroom apartment in Baguley, Bethan commenced the lease extension process as the 80 year deadline was fast nearing. The lease extension completed in August 2015. The landlord’s charges were negotiated to about 700 pounds.
Mr and Mrs. Y Cooper was assigned a lease of a studio apartment in Baguley in August 2011. The question was if we could shed any light on how much (approximately) price could be to extend the lease by ninety years. Similar premises in Baguley with an extended lease were in the region of £280,000. The average ground rent payable was £45 invoiced annually. The lease elapsed on 27 January 2095. Having 70 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including professional charges.
In 2012 we were contacted by Dr Andrew Nguyen who, having owned a studio flat in Baguley in September 2000. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Comparable residencies in Baguley with an extended lease were worth £218,400. The mid-range amount of ground rent was £60 billed every twelve months. The lease ran out on 27 January 2084. Considering the 59 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £27,600 and £31,800 exclusive of legals.