As the the remaining lease term of a Chorlton residential lease lessens so does its value and therefore the value of your property. If the residual term has, beyond 125 years to run then this decrease may be negligible however there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should consider extending sooner as opposed to later. The majority of flat owners in Chorlton will meet the qualifying criteria; nevertheless a conveyancing solicitor will be able to advise whether you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold premises in Chorlton 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 home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start 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. |
Using our service gives you enhanced control over the value of your Chorlton leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Gabriel was the the leasehold owner of a conversion flat in Chorlton on the market with a lease of fraction over 61 years unexpired. Gabriel informally spoke with his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Gabriel to invoke his statutory right. Gabriel obtained expert legal guidance and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Last Autumn we were contacted by Mrs Yasmin García , who moved into a purpose-built flat in Chorlton in April 2000. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Identical residencies in Chorlton with an extended lease were valued around £237,600. The average amount of ground rent was £45 collected quarterly. The lease ran out in 2093. Having 67 years remaining we estimated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 exclusive of expenses.
Last Christmas we were e-mailed by Ms R Roux , who owned a studio apartment in Chorlton in January 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparative flats in Chorlton with 100 year plus lease were in the region of £280,000. The mid-range amount of ground rent was £55 invoiced per annum. The lease ended on 27 April 2104. Taking into account 78 years unexpired we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 plus costs.