It’s a harsh truth that a Chorlton cum Hardy residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Chorlton cum Hardy property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining dips under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Chorlton cum Hardy will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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. |
| 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. |
The conveyancers that we work with procure Chorlton cum Hardy 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.
Following unsuccessful discussions with the landlord of her ground floor flat in Chorlton cum Hardy, Jasmine started the lease extension process as the 80 year deadline was fast nearing. The legal work was concluded in February 2011. The landlord’s fees were negotiated to under 500 GBP.
In 2010 we were called by Ms A Davies who, having took over the lease of a studio apartment in Chorlton cum Hardy in January 2006. We are asked if we could estimate the price could be to prolong the lease by a further 90 years. Similar properties in Chorlton cum Hardy with 100 year plus lease were valued about £205,000. The mid-range amount of ground rent was £50 billed yearly. The lease expired on 23 November 2105. Having 79 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including legals.
Dr V Brooks bought a garden apartment in Chorlton cum Hardy in August 2006. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Comparative flats in Chorlton cum Hardy with 100 year plus lease were valued about £275,000. The average ground rent payable was £65 collected every twelve months. The lease lapsed on 27 June 2094. Considering the 68 years unexpired we estimated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of fees.