Unfortunately that a Eccles residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Eccles property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher amount will be due. Most leasehold owners in Eccles will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Engaging our service gives you better control over the value of your Eccles leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Zachary, came critically close to the 80-year threshold with the lease on his garden apartment in Eccles. Having purchased his home two decades ago, the lease term was of little interest. Fortunately, he recognised he would soon be paying an escalated premium for a lease extension. Zachary arranged for a lease extension at the eleventh hour last July. Zachary and the landlord who owned the flat above eventually settled on an amount of £6,000 . If the lease had dropped lower than 80 years, the price would have gone up by at least £1,050.
Last Winter we were approach by Ms Madeleine Sharif , who took over the lease of a ground floor apartment in Eccles in November 1999. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Comparative residencies in Eccles with an extended lease were worth £198,800. The average amount of ground rent was £55 billed quarterly. The lease ended in 2080. Having 55 years remaining we approximated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 exclusive of fees.
Last month we were phoned by Mr U Girard , who was assigned a lease of a ground floor flat in Eccles in March 2004. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year extension to my lease. Identical residencies in Eccles with an extended lease were in the region of £300,000. The average amount of ground rent was £50 invoiced quarterly. The lease ran out in 2100. Having 75 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of fees.