When it comes to domestic leasehold premises in Gorton, you are actually purchasing a right to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than eighty years left. Anyone in Gorton with a lease nearing 81 years remaining should seriously think of extending it sooner rather than later. Once the lease term has below 80 years remaining, under the relevant legislation the landlord can calculate and demand a larger amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold premises in Gorton with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Gorton 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 conveyancer we work with provide it.
Finley owned a studio flat in Gorton being marketed with a lease of a few days over fifty eight years left. Finley on an informal basis approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Finley to invoke his statutory right. Finley obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
Last month we were called by Mr and Mrs. P Howard , who purchased a studio apartment in Gorton in April 2008. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Similar premises in Gorton with 100 year plus lease were valued around £243,000. The average amount of ground rent was £65 billed yearly. The lease came to a finish on 20 June 2088. Given that there were 63 years outstanding we calculated the compensation to the landlord for the lease extension to be within £20,000 and £23,000 exclusive of costs.
In 2012 we were e-mailed by Dr Archie Garcia who, having was assigned a lease of a one bedroom flat in Gorton in June 1995. The question was if we could estimate the premium would likely be to extend the lease by an additional years. Comparable properties in Gorton with a long lease were valued around £181,600. The mid-range ground rent payable was £55 invoiced annually. The lease finished on 10 January 2077. Considering the 52 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 exclusive of costs.