The value of Eccles leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the unexpired lease term is below than 80 years
Leasehold residencies in Eccles with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Retaining our service gives you enhanced control over the value of your Eccles 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.
Connor was the the leasehold owner of a high value apartment in Eccles being marketed with a lease of fraction over fifty eight years remaining. Connor on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 per annum. Ordinarily, ground rent would not be payable on a lease extension were Connor to invoke his statutory right. Connor procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Ms M Parker moved into a ground floor flat in Eccles in July 2007. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Comparable homes in Eccles with an extended lease were in the region of £216,000. The average amount of ground rent was £60 collected per annum. The lease lapsed in 2083. Considering the 58 years remaining we calculated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus professional charges.
Last Autumn we were e-mailed by Mr and Mrs. D Mercier , who owned a garden apartment in Eccles in October 2003. The question was if we could estimate the price would be for a ninety year lease extension. Comparative homes in Eccles with 100 year plus lease were worth £205,000. The mid-range amount of ground rent was £50 billed annually. The lease ran out on 16 August 2103. Taking into account 78 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including legals.