There is no doubt about it a leasehold flat or house in Chorlton is a wasting asset as a result of the diminishing lease term. If the lease has, beyond 99 years to run then this decrease may be negligible nevertheless there will become a stage when a lease has fewer than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should consider extending sooner than later. Most flat owners in Chorlton will qualify for this right; nevertheless a lawyer will be able to advise if you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold residencies in Chorlton with more than 100 years remaining 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 home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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. |
| 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 handle Chorlton 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.
Last October Arthur, started to get near to the eighty-year mark with the lease on his studio flat in Chorlton. In buying his flat two decades ago, the length of the lease was of no bearing. Thankfully, he realised he would soon be paying way over the odds for Extending the lease. Arthur was able to extend his lease just ahead of time last May. Arthur and the freeholder via the management company in the end agreed on sum of £6,000 . If the lease had fallen below 80 years, the sum would have gone up by at least £1,075.
In 2011 we were approached by Mrs Jennifer Rivera who, having bought a garden flat in Chorlton in March 2006. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparative homes in Chorlton with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £55 collected every twelve months. The lease lapsed in 2101. Taking into account 76 years left we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.
Dr B François purchased a garden apartment in Chorlton in May 2006. The question was if we could approximate the premium could be to extend the lease by a further 90 years. Similar residencies in Chorlton with 100 year plus lease were worth £176,200. The average ground rent payable was £65 collected quarterly. The lease lapsed on 3 April 2081. Taking into account 56 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £29,500 and £34,000 not including expenses.