For anyone whose Middlewich home is held on a long lease, the message is clear – if nothing is done, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The lawyers that we work with handle Middlewich 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.
During the course of the last few months Ryan, came critically close to the 80-year threshold with the lease on his studio apartment in Middlewich. In buying his flat 19 years previously, the length of the lease was of no interest. Thankfully, he recognised he would imminently be paying an escalated premium for Extending the lease. Ryan extended the lease just ahead of time last August. Ryan and the freeholder via the managing agents subsequently agreed on sum of £5,500 . If he not met the deadline, the amount would have gone up by at least £875.
Last March we were approach by Mr V Clark , who took over the lease of a basement flat in Middlewich in August 2006. The dilemma was if we could approximate the premium would be to extend the lease by ninety years. Identical homes in Middlewich with a long lease were in the region of £261,600. The average amount of ground rent was £60 collected quarterly. The lease concluded on 1 June 2078. Given that there were 52 years left we estimated the compensation to the landlord for the lease extension to be between £39,000 and £45,000 exclusive of costs.
Mr T Cox was assigned a lease of a garden flat in Middlewich in August 2000. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Identical premises in Middlewich with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease finished in 2089. Given that there were 63 years left we estimated the premium to the landlord to extend the lease to be between £17,100 and £19,800 not including professional charges.