For those whose Cheadle flat is held on a long lease, the message is clear – if nothing is done, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
Leasehold residencies in Cheadle with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire Building Society | 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. |
The lawyers that we work with handle Cheadle 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.
14 months ago Thomas, came perilously near to the 80-year threshold with the lease on his studio flat in Cheadle. Having purchased his property two decades ago, the lease term was of no significance. Fortunately, he noticed he would soon be paying an escalated premium for Extending the lease. Thomas extended the lease just ahead of time in September. Thomas and the freeholder subsequently settled on an amount of £5,500 . If the lease had fallen to less than eighty years, the price would have become more costly by at least £1,075.
Last Autumn we were approach by Mrs F Simon , who acquired a purpose-built flat in Cheadle in January 2003. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by ninety years. Identical homes in Cheadle with an extended lease were in the region of £198,400. The mid-range ground rent payable was £65 invoiced per annum. The lease lapsed in 2085. Having 59 years left we approximated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 plus legals.
Mrs Nicole Martin took over the lease of a ground floor flat in Cheadle in June 2009. The question was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparable properties in Cheadle with an extended lease were valued around £255,000. The average ground rent payable was £50 billed annually. The lease concluded on 22 January 2096. Having 70 years outstanding we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including professional charges.