Unfortunately that a Chorley 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 reduction being disguised by increases in the Chorley property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining falls under 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Chorley will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 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 |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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 conveyancers that we work with procure Chorley 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 conveyancing solicitor we work with provide it.
In 2014 Edward, came seriously close to the 80-year mark with the lease on his first floor apartment in Chorley. In buying his property two decades ago, the length of the lease was of little significance. Thankfully, he became aware that he needed to take steps soon on a lease extension. Edward extended the lease at the eleventh hour in July. Edward and the freeholder subsequently settled on a premium of £5,000 . If the lease had dropped to less than eighty years, the figure would have gone up by at least £1,125.
Mr O Young acquired a one bedroom flat in Chorley in August 1999. The question was if we could approximate the price would be for a ninety year extension to my lease. Comparable residencies in Chorley with an extended lease were valued around £191,400. The average ground rent payable was £55 invoiced annually. The lease expiry date was in 2080. Having 54 years outstanding we estimated the premium to the landlord for the lease extension to be between £34,200 and £39,600 exclusive of professional charges.
Last year we were phoned by Mr T Vincent , who acquired a one bedroom flat in Chorley in February 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Identical residencies in Chorley with 100 year plus lease were in the region of £295,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease ran out on 28 October 2100. Considering the 74 years as a residual term we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus professional charges.