The market value of a leasehold property in Rochdale is impacted by how many years the lease has left to run. If it is near to or less than eighty years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. It is preferable to start the lease extension process when the lease still has 82 years unexpired so that all matters can be finalised in advance of the eighty year threshold. Current legislation enables Rochdale qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Rochdale with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| 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; |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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 conveyancing solicitor we work with provide it.
Last year Ben, started to get near to the eighty-year mark with the lease on his studio flat in Rochdale. Having bought his flat two decades ago, the length of the lease was of minimal significance. As luck would have it, he noticed he needed to take action soon on a lease extension. Ben arranged for a lease extension just under the wire in July. Ben and the landlord subsequently agreed on sum of £5,000 . If he not met the deadline, the price would have become more costly by a minimum £1,000.
Mr P Nguyen moved into a one bedroom apartment in Rochdale in March 2010. We are asked if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparative homes in Rochdale with a long lease were valued about £191,400. The average amount of ground rent was £55 billed per annum. The lease elapsed in 2079. Considering the 54 years left we estimated the compensation to the landlord for the lease extension to be within £34,200 and £39,600 plus fees.
In 2010 we were called by Mrs Niamh André who, having owned a ground floor apartment in Rochdale in October 2007. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Similar homes in Rochdale with a long lease were valued about £295,000. The average amount of ground rent was £45 billed per annum. The lease expired on 24 May 2099. Considering the 74 years remaining we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus legals.