It’s an underpublicised certainty that a Bolton residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Bolton property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term slips under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Bolton will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Bolton 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.
Half a year ago Tyler, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Bolton. In buying his home two decades ago, the lease term was of no relevance. As luck would have it, he realised he needed to take steps soon on Extending the lease. Tyler extended the lease just ahead of time last June. Tyler and the freeholder via the managing agents in the end agreed on an amount of £5,500 . If he had missed the deadline, the price would have gone up by at least £1,125.
In 2009 we were contacted by Mr V Leroy who, having was assigned a lease of a first floor flat in Bolton in September 1995. The dilemma was if we could estimate the premium would likely be for a 90 year lease extension. Identical properties in Bolton with 100 year plus lease were worth £176,200. The mid-range amount of ground rent was £65 billed every twelve months. The lease termination date was on 25 March 2081. Having 56 years unexpired we calculated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 plus professional charges.
Last month we were approach by Mr and Mrs. E Wright , who bought a garden flat in Bolton in May 2012. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparative flats in Bolton with a long lease were valued about £237,600. The average ground rent payable was £45 invoiced annually. The lease concluded in 2092. Having 67 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 exclusive of fees.