The basic rule is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Gatley can extend the lease for an additional ninety years under legislation. Do think carefully before delaying your Gatley lease extension. Postponing the costs today simply increases the price you will eventually be required to pay to extend the lease.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be worth the same as a freehold for many years in the future.
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you better control over the value of your Gatley leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Jake, started to get close to the eighty-year threshold with the lease on his basement flat in Gatley. In buying his home two decades ago, the length of the lease was of minimal relevance. Thankfully, he became aware that he would imminently be paying an inflated amount for Extending the lease. Jake was able to extend his lease just under the wire last July. Jake and the freeholder via the management company subsequently settled on an amount of £5,000 . If he failed to meet the deadline, the sum would have escalated by at least £850.
In 2009 we were e-mailed by Dr Luke Jones who, having purchased a basement apartment in Gatley in September 2004. The dilemma was if we could approximate the premium would be for a ninety year lease extension. Comparable flats in Gatley with 100 year plus lease were worth £191,400. The mid-range ground rent payable was £55 collected quarterly. The lease finished on 13 September 2079. Having 54 years left we approximated the compensation to the freeholder for the lease extension to be between £34,200 and £39,600 exclusive of fees.
Last Winter we were called by Dr Abigail Davis , who acquired a basement apartment in Gatley in August 1997. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable premises in Gatley with a long lease were worth £295,000. The average amount of ground rent was £45 billed quarterly. The lease terminated on 12 January 2099. Given that there were 74 years as a residual term we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.