Unfortunately that a Fallowfield residential lease is a deteriorating asset. The lease value drops 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 Fallowfield property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining falls under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Fallowfield will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold premises in Fallowfield with over one hundred years remaining 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 premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant 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 are not acceptable. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Fallowfield,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Fallowfield valuers.
In 2014 Michael, came very close to the 80-year mark with the lease on his basement flat in Fallowfield. In buying his flat two decades ago, the unexpired term was of little interest. Thankfully, he recognised he would soon be paying an inflated amount for Extending the lease. Michael arranged for a lease extension just ahead of time in May. Michael and the freeholder via the managing agents subsequently settled on sum of £5,500 . If the lease had slipped to less than 80 years, the amount would have increased by a minimum £1,050.
Last Spring we were phoned by Mr and Mrs. C Morgan , who purchased a one bedroom apartment in Fallowfield in February 2009. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparable residencies in Fallowfield with an extended lease were in the region of £261,600. The mid-range ground rent payable was £60 billed per annum. The lease ran out in 2078. Considering the 52 years remaining we calculated the premium to the freeholder to extend the lease to be within £39,000 and £45,000 plus professional charges.
Mr and Mrs. O Morgan completed a ground floor flat in Fallowfield in July 2011. We are asked if we could estimate the price would likely be for a ninety year lease extension. Similar premises in Fallowfield with a long lease were valued about £218,000. The average ground rent payable was £45 billed per annum. The lease ended in 2089. Considering the 63 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £17,100 and £19,800 exclusive of costs.