Unfortunately that a Didsbury residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Didsbury property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining slips below 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 Most leasehold owners in Didsbury will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Didsbury,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 Didsbury valuers.
Subsequent to lengthy negotiations with the landlord of her studio flat in Didsbury, Grace started the lease extension process just as her lease was coming close to the critical eighty-year deadline. The transaction completed in September 2007. The freeholder’s costs were kept to an absolute minimum.
In 2012 we were phoned by Mr and Mrs. O Moore who, having completed a one bedroom apartment in Didsbury in May 2010. The question was if we could shed any light on how much (approximately) price would likely be to extend the lease by a further 90 years. Identical flats in Didsbury with an extended lease were valued about £216,000. The mid-range ground rent payable was £60 invoiced yearly. The lease expired on 17 March 2084. Taking into account 58 years outstanding we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including expenses.
Dr S Howard moved into a basement apartment in Didsbury in June 2008. The dilemma was if we could approximate the price would be to extend the lease by a further 90 years. Identical properties in Didsbury with an extended lease were valued about £205,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease concluded in 2105. Considering the 79 years unexpired we calculated the compensation to the landlord for the lease extension to be between £7,600 and £8,800 not including fees.