The market value of a leasehold property in Bolton is impacted by how long the lease has remaining. If it is near to or fewer than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be concluded in advance of the 80 year cut off point. Current legislation enables Bolton qualifying lessees to an additional term of 90 years over and above the unexpired term, at a nominal rent (no ground rent). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Bolton with more than 100 years remaining on the lease are often 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 upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Bolton leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Alex, came precariously near to the eighty-year mark with the lease on his purpose- built apartment in Bolton. In buying his home two decades ago, the length of the lease was of no interest. by good luck, he noticed he would imminently be paying an escalated premium for Extending the lease. Alex arranged for a lease extension at the eleventh hour last April. Alex and the landlord ultimately settled on a premium of £5,500 . If he not met the deadline, the amount would have increased by a minimum £850.
Last Christmas we were phoned by Dr K Johnson , who completed a newly refurbished apartment in Bolton in March 2001. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar homes in Bolton with a long lease were worth £220,400. The mid-range amount of ground rent was £45 billed per annum. The lease concluded on 28 October 2088. Having 64 years left we estimated the compensation to the landlord to extend the lease to be within £16,200 and £18,600 plus legals.
In 2013 we were approached by Mr N Martínez who, having acquired a purpose-built flat in Bolton in October 2008. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Similar flats in Bolton with a long lease were in the region of £270,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease expired on 27 August 2099. Taking into account 75 years remaining we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus professional charges.