The re-sale value of a leasehold property in Macclesfield depends on how many years the lease has left to run. If it is near to or fewer than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is ideal to start the lease extension process when a lease still has 82 years unexpired so that a lease extension can be finalised prior to the 80 year mark. Current legislation entitles Macclesfield qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Macclesfield leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Alexander owned a 2 bedroom apartment in Macclesfield on the market with a lease of a few days over sixty years outstanding. Alexander on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Alexander to exercise his statutory right. Alexander procured expert advice and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
Mrs Abigail Clarke owned a one bedroom apartment in Macclesfield in September 2004. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Similar premises in Macclesfield with an extended lease were worth £264,000. The average ground rent payable was £60 billed every twelve months. The lease terminated in 2078. Considering the 53 years outstanding we approximated the premium to the landlord for the lease extension to be within £37,100 and £42,800 plus fees.
Ms P Young acquired a ground floor apartment in Macclesfield in November 2007. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative flats in Macclesfield with a long lease were in the region of £225,400. The average ground rent payable was £45 invoiced monthly. The lease ended on 16 May 2089. Considering the 64 years outstanding we calculated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 exclusive of expenses.