Eccles leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Eccles tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Eccles you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Eccles with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire Building Society | 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. |
Using our service will provide you increased 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 conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy discussions with the landlord of her purpose-built flat in Eccles, Freya commenced the lease extension process as the eighty year deadline was quickly coming. The lease extension was concluded in October 2010. The landlord’s fees were negotiated to about 650 pounds.
Last Autumn we were phoned by Dr G Adams , who owned a studio apartment in Eccles in June 1996. The question was if we could estimate the premium would be to prolong the lease by an additional years. Identical premises in Eccles with a long lease were valued about £250,400. The average amount of ground rent was £65 billed every twelve months. The lease concluded in 2090. Taking into account 64 years left we estimated the premium to the landlord to extend the lease to be within £19,000 and £22,000 not including fees.
Mr and Mrs. R Campbell acquired a one bedroom apartment in Eccles in June 2003. We are asked if we could estimate the premium could be to prolong the lease by an additional years. Identical flats in Eccles with 100 year plus lease were worth £189,000. The average ground rent payable was £55 billed annually. The lease finished on 7 February 2079. Given that there were 53 years as a residual term we approximated the premium to the landlord for the lease extension to be between £28,500 and £33,000 not including legals.