For anyone whose Manchester property is held on a long lease, the message is clear – if you do nothing, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension.
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a landlord in Manchester,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Manchester valuers.
Off the back of unsuccessful negotiations with the freeholder of her first floor flat in Manchester, Katie initiated the lease extension process just as her lease was approaching the critical eighty-year threshold. The legal work was finalised in October 2014. The freeholder’s charges were negotiated to slightly above 600 pounds.
Dr Ethan Cox bought a recently refurbished apartment in Manchester in January 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by 90 years. Similar homes in Manchester with an extended lease were in the region of £270,000. The mid-range ground rent payable was £55 billed every twelve months. The lease expired in 2101. Taking into account 75 years outstanding we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.
In 2012 we were contacted by Dr Arthur Bennett who, having was assigned a lease of a ground floor apartment in Manchester in February 1999. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Similar homes in Manchester with a long lease were valued about £173,800. The average ground rent payable was £60 billed annually. The lease elapsed in 2081. Having 55 years left we estimated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 not including professional charges.