Unfortunately that a Droylsden residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Droylsden property market.Once your lease gets to 85ish years, you need to start thinking about 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 falls below 80 years - otherwise a higher amount will be due. Most leasehold owners in Droylsden will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold premises in Droylsden with more than one hundred years unexpired 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 to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service gives you enhanced control over the value of your Droylsden leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Harry owned a conversion flat in Droylsden being marketed with a lease of a little over 59 years left. Harry informally spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Harry to invoke his statutory right. Harry procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
In 2014 we were approached by Mr and Mrs. V Simon who, having purchased a purpose-built apartment in Droylsden in November 2007. We are asked if we could approximate the premium would likely be to extend the lease by ninety years. Comparable premises in Droylsden with 100 year plus lease were valued around £200,000. The average ground rent payable was £50 collected annually. The lease expiry date was on 13 June 2102. Taking into account 77 years unexpired we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus expenses.
Last month we were called by Mr and Mrs. G Laurent , who completed a studio apartment in Droylsden in January 2003. The dilemma was if we could estimate the price could be to prolong the lease by ninety years. Comparative properties in Droylsden with 100 year plus lease were valued about £260,200. The average ground rent payable was £65 collected quarterly. The lease expired on 23 May 2091. Taking into account 66 years as a residual term we approximated the premium to the landlord for the lease extension to be within £15,200 and £17,600 not including professional charges.