When it comes to residential leasehold property in Sale, you are actually buying a right to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially when there are fewer than eighty years remaining. Residents in Sale with a lease drawing near to 81 years unexpired should seriously think of extending it as soon as possible. When the lease term has below 80 years remaining, under the relevant Act the landlord can calculate and demand a larger premium, based on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold premises in Sale with more than 100 years left 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 property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Sale,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Sale valuers.
During the course of the last few months Kian, started to get near to the eighty-year mark with the lease on his basement flat in Sale. In buying his home twenty years previously, the lease term was of little significance. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Kian arranged for a lease extension at the eleventh hour in March. Kian and the freeholder ultimately agreed on a premium of £5,000 . If the lease had slipped to less than eighty years, the figure would have gone up by at least £900.
In 2011 we were phoned by Mr and Mrs. Y Taylor who, having purchased a one bedroom apartment in Sale in October 1996. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparable properties in Sale with a long lease were in the region of £260,000. The average ground rent payable was £50 collected annually. The lease concluded in 2097. Having 72 years left we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus expenses.
Last September we were phoned by Ms E Sharif , who took over the lease of a one bedroom flat in Sale in July 2012. The question was if we could approximate the premium could be to prolong the lease by 90 years. Comparative homes in Sale with an extended lease were in the region of £261,600. The average amount of ground rent was £60 billed every twelve months. The lease lapsed on 1 July 2077. Considering the 52 years remaining we approximated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 not including costs.