Childwall 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 the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Childwall residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Childwall you would be well advised to see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for 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 residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Childwall,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Childwall valuers.
Aiden was the the leasehold owner of a high value flat in Childwall being sold with a lease of a few days over 61 years outstanding. Aiden informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. No ground rent would be payable on a lease extension were Aiden to exercise his statutory right. Aiden procured expert advice and was able to make a more informed decision and handle with the matter and sell the property.
In 2011 we were approached by Mr and Mrs. L Rogers who, having acquired a recently refurbished flat in Childwall in June 2002. The question was if we could shed any light on how much (roughly) price could be to extend the lease by a further 90 years. Identical properties in Childwall with 100 year plus lease were valued around £246,800. The average ground rent payable was £60 collected quarterly. The lease ended on 23 April 2075. Given that there were 50 years unexpired we approximated the premium to the freeholder for the lease extension to be between £44,700 and £51,600 plus costs.
Mr Alex Fournier moved into a one bedroom flat in Childwall in August 2000. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by 90 years. Comparable properties in Childwall with a long lease were valued around £203,200. The average ground rent payable was £65 invoiced monthly. The lease lapsed in 2086. Considering the 61 years unexpired we approximated the premium to the freeholder for the lease extension to be between £19,000 and £22,000 exclusive of fees.