It’s a harsh truth that a Glossop residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Glossop property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term falls under 80 years, you will end up paying half of the property's 'marriage value' on top of 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 Most leasehold owners in Glossop will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold residencies in Glossop with over one hundred years remaining 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 property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you enhanced control over the value of your Glossop leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Jonathan, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Glossop. Having purchased his flat two decades ago, the length of the lease was of little importance. Luckily, he became aware that he would soon be paying way over the odds for Extending the lease. Jonathan was able to extend his lease at the eleventh hour last May. Jonathan and the landlord subsequently agreed on the final figure of £6,000 . If the lease had gone to less than 80 years, the sum would have become more exhorbitant by at least £1,000.
In 2012 we were phoned by Ms A Moore who, having acquired a purpose-built flat in Glossop in February 2008. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Similar residencies in Glossop with a long lease were valued about £265,000. The mid-range ground rent payable was £50 billed annually. The lease came to a finish in 2099. Given that there were 73 years unexpired we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.
In 2011 we were contacted by Mr Y Sánchez who, having was assigned a lease of a ground floor apartment in Glossop in May 2005. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Similar residencies in Glossop with 100 year plus lease were worth £264,000. The mid-range amount of ground rent was £60 collected annually. The lease finished in 2079. Having 53 years unexpired we approximated the premium to the landlord for the lease extension to be within £37,100 and £42,800 not including expenses.