The value of Chorlton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the unexpired lease term is less than 80 years
Leasehold properties in Chorlton with over one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you enhanced control over the value of your Chorlton leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Owen, started to get close to the eighty-year mark with the lease on his one bedroom flat in Chorlton. In buying his flat twenty years ago, the length of the lease was of minimal relevance. Fortunately, he noticed he needed to take steps soon on a lease extension. Owen extended the lease just under the wire last August. Owen and the landlord who owned the flat above eventually settled on a premium of £6,000 . If he not met the deadline, the amount would have become more costly by at least £900.
Last month we were phoned by Mr and Mrs. E Jackson , who took over the lease of a first floor apartment in Chorlton in April 2007. The dilemma was if we could approximate the price would be for a ninety year extension to my lease. Similar flats in Chorlton with 100 year plus lease were in the region of £176,200. The average amount of ground rent was £65 billed annually. The lease elapsed in 2081. Given that there were 56 years left we calculated the premium to the landlord to extend the lease to be within £29,500 and £34,000 plus costs.
In 2009 we were e-mailed by Dr U Nguyen who, having acquired a garden apartment in Chorlton in May 1997. We are asked if we could estimate the price would be to extend the lease by 90 years. Comparable premises in Chorlton with an extended lease were worth £237,600. The mid-range ground rent payable was £45 collected annually. The lease came to a finish in 2092. Taking into account 67 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 plus legals.