Disley residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
Leasehold properties in Disley with in excess of one hundred years left on the lease are often regarded as a ‘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 buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Disley 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.
During the course of the last few months Rory, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Disley. In buying his home twenty years ago, the lease term was of minimal relevance. Fortunately, he became aware that he needed to take action soon on a lease extension. Rory extended the lease just ahead of time last May. Rory and the landlord who owned the flat above ultimately agreed on the final figure of £6,000 . If he not met the deadline, the premium would have increased by a minimum £900.
In 2012 we were called by Mrs Georgia Simon who, having acquired a one bedroom apartment in Disley in February 2009. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparative properties in Disley with an extended lease were valued about £250,400. The average amount of ground rent was £65 billed yearly. The lease terminated in 2090. Having 64 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 plus legals.
In 2011 we were approached by Ms P Parker who, having acquired a purpose-built flat in Disley in February 2007. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Disley with an extended lease were valued around £184,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease termination date was on 10 February 2079. Having 53 years remaining we calculated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 not including fees.