For anyone whose Didsbury property is held on a long lease, the message is clear – if you ignore the situation, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date 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. |
| 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 experts that we work with will always be willing 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.
After lengthy discussions with the landlord of her two bedroom flat in Didsbury, Lily started the lease extension process just as the lease was coming close to the all-important 80-year mark. The transaction completed in June 2008. The landlord’s costs were kept to an absolute minimum.
In 2014 we were e-mailed by Dr Lily Bonnet who, having was assigned a lease of a garden flat in Didsbury in May 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Comparative premises in Didsbury with a long lease were in the region of £189,000. The mid-range ground rent payable was £55 invoiced annually. The lease ended on 11 September 2079. Considering the 53 years as a residual term we calculated the premium to the landlord for the lease extension to be between £28,500 and £33,000 plus expenses.
Ms G Baker completed a garden apartment in Didsbury in July 1997. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Comparative flats in Didsbury with 100 year plus lease were valued about £290,000. The average ground rent payable was £45 invoiced annually. The lease ended on 18 April 2099. Having 73 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.