Urmston leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Urmston residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Urmston you must see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for decades to come.
| 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 are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Urmston 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 conveyancer we work with provide it.
Omar owned a conversion apartment in Urmston being sold with a lease of just over fifty eight years remaining. Omar informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Omar to invoke his statutory right. Omar obtained expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
Mrs A González bought a first floor flat in Urmston in September 2007. The dilemma was if we could shed any light on how much (approximately) price would likely be to extend the lease by ninety years. Comparative premises in Urmston with 100 year plus lease were valued around £290,000. The average amount of ground rent was £45 billed yearly. The lease came to a finish on 19 May 2099. Having 73 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus legals.
In 2011 we were e-mailed by Mrs S Alexander who, having purchased a purpose-built apartment in Urmston in May 2002. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Comparative flats in Urmston with an extended lease were in the region of £240,600. The average amount of ground rent was £60 billed monthly. The lease finished in 2088. Considering the 62 years left we estimated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 not including costs.