Irlam leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Irlam tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Irlam you must see if your lease has between 70 and 90 years left. There are good reasons why a Irlam leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 Irlam,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 Irlam valuers.
Mason owned a high value flat in Irlam on the market with a lease of a little over sixty years remaining. Mason on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 per annum. No ground rent would be due on a lease extension were Mason to invoke his statutory right. Mason obtained expert advice and secured an acceptable deal informally and readily saleable.
Dr D Wood was assigned a lease of a basement apartment in Irlam in January 2005. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparative properties in Irlam with a long lease were valued about £235,200. The mid-range ground rent payable was £45 billed quarterly. The lease concluded on 24 September 2092. Considering the 66 years remaining we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus legals.
In 2012 we were phoned by Ms O Davis who, having purchased a newly refurbished flat in Irlam in June 2007. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Comparative premises in Irlam with an extended lease were in the region of £275,000. The average amount of ground rent was £55 invoiced annually. The lease ran out on 9 April 2103. Considering the 77 years left we calculated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 not including expenses.