With a domestic leasehold premises in Sale, you are in fact renting it for a certain period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater especially once there are fewer than eighty years remaining. Anyone in Sale with a lease drawing near to 81 years left should seriously think of extending it without delay. Once a lease has less than 80 years outstanding, under the relevant legislation the landlord is entitled to calculate and levy a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold properties in Sale with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Sale leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Charlie, came seriously near to the 80-year threshold with the lease on his one bedroom flat in Sale. In buying his home twenty years ago, the length of the lease was of no interest. Fortunately, he realised he needed to take steps soon on Extending the lease. Charlie was able to extend his lease just in the nick of time last January. Charlie and the landlord subsequently settled on sum of £6,000 . If the lease had dipped to less than eighty years, the price would have increased by at least £1,075.
In 2011 we were contacted by Mr and Mrs. N Bell who, having completed a purpose-built apartment in Sale in March 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Identical premises in Sale with 100 year plus lease were valued about £255,000. The average ground rent payable was £50 billed per annum. The lease terminated in 2096. Taking into account 70 years as a residual term we approximated the premium to the landlord for the lease extension to be within £10,500 and £12,000 plus expenses.
Last Autumn we were approach by Mr J Taylor , who acquired a one bedroom flat in Sale in May 1999. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Comparative flats in Sale with a long lease were valued about £246,800. The mid-range ground rent payable was £60 billed per annum. The lease concluded in 2076. Having 50 years left we approximated the compensation to the landlord for the lease extension to be between £44,700 and £51,600 exclusive of costs.