Unfortunately that a Cheadle residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Cheadle property prices.Where your lease has approximately ninety years left, you should start considering 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 falls lower than 80 years - otherwise a higher premium will be payable. Most flat owners in Cheadle will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold properties in Cheadle with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| 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 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; |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Cheadle,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 in-depth market knowledge and the close ties they enjoy with Cheadle valuers.
Muhammad owned a 2 bedroom flat in Cheadle on the market with a lease of a little over 59 years remaining. Muhammad informally approached his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Muhammad to exercise his statutory right. Muhammad procured expert advice and secured satisfactory deal without resorting to tribunal and readily saleable.
Mr Kian Dupont bought a one bedroom apartment in Cheadle in September 2005. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Similar residencies in Cheadle with an extended lease were worth £261,600. The mid-range ground rent payable was £60 invoiced quarterly. The lease finished on 24 February 2077. Given that there were 52 years left we approximated the premium to the freeholder to extend the lease to be between £39,000 and £45,000 not including professional charges.
Mr and Mrs. W Johnson bought a studio apartment in Cheadle in January 2005. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Cheadle with an extended lease were in the region of £218,000. The average amount of ground rent was £45 invoiced monthly. The lease finished in 2088. Having 63 years unexpired we estimated the compensation to the landlord for the lease extension to be between £17,100 and £19,800 plus professional charges.