Unfortunately that a Disley residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Disley property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Disley will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not qualify. 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 conveyancing solicitor throughout the process.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Disley,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Disley valuers.
Last October Ethan, came precariously close to the 80-year mark with the lease on his leasehold flat in Disley. Having purchased his flat twenty years previously, the length of the lease was of minimal importance. by good luck, he recognised he would imminently be paying way over the odds for a lease extension. Ethan was able to extend his lease at the eleventh hour last May. Ethan and the freeholder eventually agreed on the final figure of £5,000 . If the lease had slipped lower than eighty years, the sum would have gone up by a minimum £875.
Dr Jack Bertrand completed a ground floor flat in Disley in April 2008. The question was if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Identical homes in Disley with an extended lease were worth £225,800. The average amount of ground rent was £60 billed per annum. The lease concluded in 2085. Taking into account 60 years left we approximated the compensation to the freeholder to extend the lease to be within £23,800 and £27,400 not including costs.
Last Spring we were e-mailed by Mr A Clark , who purchased a one bedroom apartment in Disley in October 2002. The dilemma was if we could estimate the price could be to extend the lease by a further 90 years. Identical residencies in Disley with 100 year plus lease were worth £210,000. The mid-range amount of ground rent was £50 collected monthly. The lease termination date was on 17 September 2105. Considering the 80 years left we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.