Preston Park residential property owned on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
Leasehold properties in Preston Park with over one hundred years outstanding 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 situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Coventry Building Society | |
| Godiva Mortgages | |
| The Mortgage Works | |
| Yorkshire Building Society |
The conveyancing solicitors that we work with undertake Preston Park 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.
Felix owned a 2 bedroom apartment in Preston Park on the market with a lease of a little over 59 years outstanding. Felix on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Felix to exercise his statutory right. Felix obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
In 2009 we were approached by Dr M Collins who, having bought a recently refurbished apartment in Preston Park in July 2003. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Similar flats in Preston Park with an extended lease were valued around £275,000. The mid-range ground rent payable was £55 collected quarterly. The lease terminated on 2 July 2103. Given that there were 77 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus legals.
Last Winter we were phoned by Ms Erin Khan , who bought a newly refurbished apartment in Preston Park in January 2005. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Similar premises in Preston Park with an extended lease were worth £183,600. The average ground rent payable was £65 billed every twelve months. The lease ran out in 2083. Having 57 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 plus legals.