On the balance of probabilities if you own a flat in Sale you actually own a long leasehold interest over your property
Leasehold residencies in Sale with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Sale 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.
Felix was the the leasehold proprietor of a conversion apartment in Sale on the market with a lease of fraction over 59 years unexpired. Felix on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Felix to exercise his statutory right. Felix obtained expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Last month we were contacted by Dr Matthew Turner , who moved into a first floor apartment in Sale in November 2007. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Similar flats in Sale with 100 year plus lease were worth £280,000. The mid-range ground rent payable was £55 billed quarterly. The lease ended on 20 September 2104. Considering the 78 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including professional charges.
Last Winter we were approach by Ms O González , who acquired a studio apartment in Sale in September 2010. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Similar flats in Sale with a long lease were in the region of £191,000. The mid-range amount of ground rent was £65 billed monthly. The lease terminated on 7 February 2084. Given that there were 58 years as a residual term we approximated the premium to the landlord for the lease extension to be within £23,800 and £27,400 not including fees.