It’s an underpublicised certainty that a Ellesmere Port residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Ellesmere Port property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term slips below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Ellesmere Port will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold premises in Ellesmere Port with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Ellesmere Port lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Lucas owned a studio apartment in Ellesmere Port on the market with a lease of a few days over 59 years unexpired. Lucas on an informal basis spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Lucas to exercise his statutory right. Lucas procured expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2014 we were e-mailed by Mr and Mrs. N Rose who, having moved into a one bedroom apartment in Ellesmere Port in September 2000. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Similar premises in Ellesmere Port with an extended lease were worth £208,600. The average ground rent payable was £60 billed quarterly. The lease ended on 26 July 2083. Given that there were 57 years unexpired we estimated the premium to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of expenses.
In 2010 we were contacted by Mr Muhammad Collins who, having owned a basement apartment in Ellesmere Port in June 2001. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparative residencies in Ellesmere Port with a long lease were in the region of £200,000. The mid-range ground rent payable was £50 billed annually. The lease ended on 6 January 2103. Having 77 years outstanding we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including fees.