Unfortunately that a Manchester residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Manchester property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Manchester will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Manchester with over one hundred years outstanding 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 property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your Manchester leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
After unsuccessful correspondence with the freeholder of her studio apartment in Manchester, Rhiannon commenced the lease extension process just as the lease was approaching the crucial 80-year deadline. The legal work was concluded in October 2005. The landlord’s costs were kept to an absolute minimum.
Mrs I Bertrand bought a studio apartment in Manchester in April 2012. The question was if we could estimate the price would likely be for a 90 year lease extension. Similar flats in Manchester with 100 year plus lease were worth £250,000. The mid-range ground rent payable was £50 collected every twelve months. The lease finished on 1 October 2095. Having 69 years unexpired we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus costs.
In 2014 we were approached by Ms Zoe Morgan who, having completed a one bedroom flat in Manchester in May 1998. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in Manchester with a long lease were in the region of £290,000. The average ground rent payable was £55 collected monthly. The lease concluded in 2106. Given that there were 80 years remaining we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of costs.