The market value of a leasehold property in Irlam is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that a lease extension can be finalised in advance of the eighty year mark. Statute entitles Irlam qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Irlam with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
Irrespective of whether you are a tenant or a landlord 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.
16 months ago Hunter, came dangerously close to the eighty-year mark with the lease on his first floor flat in Irlam. In buying his property 18 years ago, the lease term was of no relevance. Luckily, he became aware that he needed to take action soon on Extending the lease. Hunter extended the lease just under the wire last August. Hunter and the freeholder via the managing agents eventually settled on the final figure of £5,000 . If the lease had gone below 80 years, the price would have become more exhorbitant by at least £875.
Last Christmas we were approach by Mr and Mrs. O Mason , who completed a basement apartment in Irlam in September 2012. We are asked if we could estimate the premium would be to extend the lease by 90 years. Comparative homes in Irlam with an extended lease were valued around £270,000. The average ground rent payable was £55 billed annually. The lease ran out on 23 January 2099. Considering the 75 years unexpired we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
Mr and Mrs. A Brown was assigned a lease of a basement apartment in Irlam in May 2009. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Identical homes in Irlam with an extended lease were valued about £173,800. The mid-range ground rent payable was £60 invoiced monthly. The lease ended on 14 July 2079. Having 55 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus legals.