On the balance of probabilities if you own a flat in Cheadle Hulme you actually own a long leasehold interest over your property
Leasehold properties in Cheadle Hulme with in excess of 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 premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Cheadle Hulme 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 lawyer we work with provide it.
In recent months Jasper, came precariously close to the eighty-year mark with the lease on his ground floor apartment in Cheadle Hulme. Having bought his property two decades ago, the lease term was of minimal interest. Thankfully, it dawned on him that he would soon be paying an escalated premium for a lease extension. Jasper arranged for a lease extension just in the nick of time in June. Jasper and the freeholder via the managing agents subsequently agreed on a premium of £5,500 . If the lease had fallen lower than eighty years, the amount would have increased by at least £1,100.
In 2011 we were contacted by Dr Jamie Cook who, having moved into a one bedroom apartment in Cheadle Hulme in June 2009. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical flats in Cheadle Hulme with a long lease were in the region of £295,000. The average amount of ground rent was £45 billed every twelve months. The lease finished on 18 June 2099. Given that there were 74 years unexpired we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus fees.
In 2011 we were called by Dr Bethan Vincent who, having purchased a basement flat in Cheadle Hulme in August 1997. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparable flats in Cheadle Hulme with 100 year plus lease were in the region of £243,000. The mid-range ground rent payable was £65 collected per annum. The lease ended on 17 October 2088. Having 63 years remaining we approximated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 not including fees.