The re-sale value of a leasehold property in Hulme depends on how many years the lease has remaining. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when a lease still has 82 years remaining so that formalities can be addressed well before the eighty year threshold. Current legislation enables Hulme qualifying lessees to acquire a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Hulme,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Hulme valuers.
Following protracted correspondence with the landlord of her first floor flat in Hulme, Katherine commenced the lease extension process just as the lease was approaching the critical 80-year threshold. The lease extension was concluded in April 2014. The landlord’s charges were kept to an absolute minimum.
Mrs Ellen Cox moved into a first floor flat in Hulme in June 2001. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by ninety years. Comparable flats in Hulme with an extended lease were in the region of £181,600. The average ground rent payable was £55 collected every twelve months. The lease concluded in 2077. Having 52 years left we approximated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus fees.
Dr Y François was assigned a lease of a garden flat in Hulme in June 2002. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Similar homes in Hulme with an extended lease were in the region of £285,000. The mid-range ground rent payable was £45 invoiced monthly. The lease finished on 5 February 2097. Taking into account 72 years left we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus expenses.