It’s a harsh certainty that a Eccles residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Eccles property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops under eighty years, you will then be required to pay 50% 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 flat owners in Eccles will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Eccles with over 100 years remaining 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 premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify 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. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Eccles leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of protracted discussions with the landlord of her purpose-built apartment in Eccles, Jessica initiated the lease extension process as the eighty year threshold was rapidly coming. The transaction was finalised in March 2012. The freeholder’s costs were restricted to slightly above 450 pounds.
In 2014 we were contacted by Dr N Evans who, having owned a studio flat in Eccles in November 1999. The dilemma was if we could estimate the price would likely be for a ninety year lease extension. Comparative flats in Eccles with an extended lease were in the region of £275,000. The average ground rent payable was £45 collected per annum. The lease came to a finish on 4 September 2094. Considering the 69 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including costs.
Mr and Mrs. V Cox took over the lease of a one bedroom apartment in Eccles in February 2012. The dilemma was if we could shed any light on how much (roughly) price could be to prolong the lease by a further 90 years. Comparable residencies in Eccles with a long lease were worth £216,000. The mid-range ground rent payable was £60 invoiced yearly. The lease concluded on 15 January 2083. Having 58 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 costs.