When it comes to long leasehold premises in Manchester, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than 80 years remaining. Residents in Manchester with a lease drawing near to 81 years unexpired should seriously think of extending it without delay. When a lease has below eighty years remaining, under the current legislation the landlord is entitled to calculate and levy a larger amount, assessed on a technical calculation, known as “marriage value” which is due.
Leasehold residencies in Manchester with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Manchester lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Reuben was the the leasehold owner of a high value flat in Manchester on the market with a lease of a little over 72 years unexpired. Reuben informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. No ground rent would be due on a lease extension were Reuben to exercise his statutory right. Reuben obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2009 we were phoned by Mr and Mrs. C Leroy who, having purchased a recently refurbished flat in Manchester in January 2006. The question was if we could approximate the premium would likely be to prolong the lease by a further 90 years. Comparable premises in Manchester with an extended lease were worth £280,000. The mid-range amount of ground rent was £55 collected per annum. The lease expired on 24 May 2104. Having 78 years left we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus expenses.
Dr Caitlin Lambert took over the lease of a studio flat in Manchester in October 1997. The dilemma was if we could estimate the price would likely be for a ninety year lease extension. Comparative residencies in Manchester with an extended lease were in the region of £191,000. The average ground rent payable was £65 invoiced per annum. The lease expired on 19 November 2084. Given that there were 58 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £23,800 and £27,400 plus legals.