The market value of a leasehold property in Urmston is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension before buying. It is ideal to start the lease extension process when the lease still has 82 years unexpired so that all matters can be addressed ahead of the eighty year cut off point. Leasehold Reform legislation entitles Urmston qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property 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. |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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 |
Regardless of whether you are a tenant or a freeholder in Urmston,the lease extension solicitors 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 Urmston valuers.
Last year Jackson, came perilously near to the 80-year threshold with the lease on his one bedroom flat in Urmston. In buying his home twenty years ago, the unexpired term was of no relevance. by good luck, he recognised he would imminently be paying way over the odds for a lease extension. Jackson was able to extend his lease just in the nick of time last September. Jackson and the landlord who owned the flat above ultimately agreed on the final figure of £5,000 . If the lease had slid to less than 80 years, the sum would have become more costly by at least £950.
In 2013 we were called by Dr H Khan who, having was assigned a lease of a purpose-built flat in Urmston in June 2002. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar flats in Urmston with a long lease were valued around £280,000. The average ground rent payable was £45 invoiced monthly. The lease elapsed in 2096. Having 70 years left we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of fees.
Dr Tommy Lewis purchased a purpose-built flat in Urmston in January 2003. We are asked if we could estimate the premium would be to extend the lease by 90 years. Comparative premises in Urmston with an extended lease were in the region of £223,400. The mid-range amount of ground rent was £60 invoiced per annum. The lease expiry date was on 17 March 2085. Given that there were 59 years remaining we calculated the premium to the landlord for the lease extension to be between £27,600 and £31,800 not including professional charges.