There is no doubt about it a leasehold flat or house in Irlam is a wasting asset as a result of the diminishing lease term. If the residual term has, in excess of 100 years remaining then this decrease may be of little impact nevertheless there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary rational as to why you should extend the lease sooner rather than later. Most flat owners in Irlam will qualify for this right; nevertheless a lawyer can advise if you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold properties in Irlam with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Regardless of whether you are a tenant or a landlord in Irlam,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 in-depth market knowledge and the close ties they enjoy with Irlam valuers.
Two years ago Lucas, started to get close to the eighty-year mark with the lease on his garden flat in Irlam. Having bought his property 18 years previously, the unexpired term was of minimal bearing. As luck would have it, he realised he needed to take steps soon on a lease extension. Lucas extended the lease at the eleventh hour last September. Lucas and the landlord who owned the flat above ultimately agreed on sum of £5,000 . If he not met the deadline, the amount would have escalated by at least £975.
In 2014 we were contacted by Dr U Sharif who, having acquired a purpose-built apartment in Irlam in November 2006. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparative residencies in Irlam with a long lease were in the region of £176,200. The average amount of ground rent was £65 invoiced monthly. The lease concluded in 2082. Taking into account 56 years remaining we calculated the premium to the landlord for the lease extension to be between £29,500 and £34,000 exclusive of fees.
In 2011 we were approached by Mr and Mrs. O Morgan who, having completed a garden flat in Irlam in May 2001. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparable premises in Irlam with 100 year plus lease were valued about £237,600. The average ground rent payable was £45 invoiced yearly. The lease terminated on 10 January 2093. Given that there were 67 years unexpired we approximated the premium to the landlord for the lease extension to be within £11,400 and £13,200 exclusive of expenses.