With a residential leasehold property in Irlam, you are actually buying a right to live in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially when there are fewer than eighty years left. Residents in Irlam with a lease approaching 81 years unexpired should seriously consider extending it as soon as possible. Once the lease term has less than 80 years outstanding, under the current Act the landlord is entitled to calculate and demand a larger premium, based on a technical calculation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Regardless of whether you are a tenant or a freeholder in Irlam,the lease extension solicitors that we work with will always be willing 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.
Off the back of unsuccessful discussions with the landlord of her two bedroom flat in Irlam, Jessica commenced the lease extension process as the 80 year mark was quickly approaching. The lease extension was finalised in May 2008. The freeholder’s fees were kept to an absolute minimum.
In 2011 we were approached by Mrs Eleanor Smith who, having acquired a basement apartment in Irlam in May 2011. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Comparable properties in Irlam with an extended lease were valued about £242,600. The mid-range ground rent payable was £45 invoiced monthly. The lease ended on 20 April 2092. Considering the 67 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £11,400 and £13,200 exclusive of professional charges.
Mr and Mrs. B Bennett bought a basement flat in Irlam in February 1995. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Comparable homes in Irlam with an extended lease were worth £280,000. The mid-range amount of ground rent was £55 billed annually. The lease terminated in 2103. Having 78 years outstanding we estimated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of costs.