It’s a harsh certainty that a Manchester residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted 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 thinking about a lease extension. If the number of years remaining dips 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 Most leasehold owners in Manchester will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold properties in Manchester with more than 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
| 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 |
The conveyancing solicitors 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 lawyer we work with provide it.
Luca was the the leasehold owner of a high value apartment in Manchester on the market with a lease of a little over 61 years remaining. Luca informally approached his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Luca to invoke his statutory right. Luca procured expert advice and secured satisfactory deal informally and sell the flat.
Last Spring we were called by Mrs Harriet Allen , who took over the lease of a newly refurbished flat in Manchester in May 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by a further 90 years. Identical premises in Manchester with a long lease were in the region of £176,200. The mid-range ground rent payable was £65 billed per annum. The lease concluded in 2081. Having 56 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £29,500 and £34,000 not including fees.
In 2013 we were approached by Mrs Chantelle Khan who, having acquired a first floor apartment in Manchester in March 1997. The question was if we could approximate the premium would be to prolong the lease by 90 years. Comparative properties in Manchester with an extended lease were worth £242,600. The mid-range ground rent payable was £45 invoiced quarterly. The lease finished on 10 March 2092. Taking into account 67 years unexpired we calculated the premium to the landlord for the lease extension to be between £11,400 and £13,200 plus expenses.