Unfortunately that a Rochdale 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 first few years due to the loss of value being disguised by increases in the Rochdale property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining falls under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Rochdale will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in Rochdale with in excess of one hundred years outstanding on the lease are sometimes 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 to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The lawyers that we work with undertake Rochdale 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.
Last year Hunter, came critically near to the eighty-year mark with the lease on his first floor flat in Rochdale. Having purchased his flat two decades ago, the unexpired term was of minimal relevance. Fortunately, he became aware that he would soon be paying an escalated premium for a lease extension. Hunter was able to extend his lease at the eleventh hour last March. Hunter and the landlord who owned the flat above in the end settled on a premium of £5,500 . If the lease had dropped below eighty years, the figure would have become more exhorbitant by a minimum £1,150.
In 2010 we were contacted by Mr and Mrs. A Cooper who, having purchased a basement flat in Rochdale in November 2007. The question was if we could estimate the premium could be to extend the lease by an additional years. Identical flats in Rochdale with an extended lease were worth £295,000. The average amount of ground rent was £45 collected quarterly. The lease finished in 2098. Given that there were 74 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.
Dr Aiden Young owned a one bedroom flat in Rochdale in April 1995. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Identical properties in Rochdale with a long lease were in the region of £243,000. The mid-range ground rent payable was £65 collected yearly. The lease terminated in 2087. Having 63 years remaining we calculated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of fees.