It’s an underpublicised truth that a Glossop residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Glossop property prices.Where your lease has approximately 90 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 dips lower than 80 years - otherwise a higher premium will be due. Most leasehold owners in Glossop will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Glossop,the lease extension lawyers 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 Glossop valuers.
Aarav owned a conversion apartment in Glossop on the market with a lease of a little over sixty years remaining. Aarav on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were Aarav to invoke his statutory right. Aarav obtained expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2010 we were e-mailed by Mr and Mrs. E Adams who, having acquired a studio apartment in Glossop in June 2004. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable residencies in Glossop with an extended lease were valued around £220,400. The average ground rent payable was £45 collected yearly. The lease terminated on 4 April 2090. Given that there were 64 years remaining we estimated the compensation to the landlord for the lease extension to be between £16,200 and £18,600 exclusive of professional charges.
Last month we were contacted by Dr K Cox , who owned a basement apartment in Glossop in July 2005. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by an additional years. Similar residencies in Glossop with a long lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced annually. The lease lapsed on 20 January 2101. Given that there were 75 years unexpired we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.