It’s a harsh certainty that a Todmorden residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Todmorden property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher premium will be payable. The majority of flat owners in Todmorden will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Retaining our service will provide you better control over the value of your Todmorden leasehold, as your property will be more valuable and saleable in respect of 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.
In recent months Owen, came critically close to the 80-year threshold with the lease on his purpose- built apartment in Todmorden. In buying his flat two decades ago, the unexpired term was of little significance. by good luck, he noticed he needed to take steps soon on a lease extension. Owen was able to extend his lease at the eleventh hour last September. Owen and the freeholder via the management company ultimately settled on sum of £6,000 . If the lease had slipped below 80 years, the figure would have increased by at least £975.
In 2014 we were approached by Mr Jacob Mason who, having purchased a basement flat in Todmorden in October 2010. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Comparable premises in Todmorden with a long lease were valued about £205,000. The mid-range ground rent payable was £50 billed per annum. The lease lapsed in 2104. Given that there were 79 years remaining we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of expenses.
In 2012 we were contacted by Mr Elijah Leroy who, having moved into a studio flat in Todmorden in October 1999. We are asked if we could approximate the premium would be to prolong the lease by an additional years. Comparative homes in Todmorden with an extended lease were worth £275,000. The average ground rent payable was £65 invoiced yearly. The lease elapsed in 2093. Having 68 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including professional charges.