The market value of a leasehold property in Great Sankey is impacted by how long the lease has left to run. If it is close to or less than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of buying. Ideally one should start the process of extending the lease is when a lease still has 82 years to run so that all matters can be finalised well before the eighty year cut off point. Current legislation entitles Great Sankey qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Great Sankey 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.
Last Summer Jason, came critically close to the 80-year mark with the lease on his two bedroom apartment in Great Sankey. Having bought his flat 18 years ago, the lease term was of little bearing. As luck would have it, he noticed he would soon be paying way over the odds for Extending the lease. Jason extended the lease just under the wire last July. Jason and the freeholder eventually settled on sum of £5,000 . If he not met the deadline, the price would have gone up by at least £1,000.
Last June we were called by Dr T Rodríguez , who bought a ground floor flat in Great Sankey in August 2006. The question was if we could approximate the premium would likely be to extend the lease by ninety years. Identical properties in Great Sankey with 100 year plus lease were in the region of £200,000. The average amount of ground rent was £50 invoiced annually. The lease came to a finish on 8 June 2104. Given that there were 78 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including professional charges.
Last Autumn we were phoned by Mr and Mrs. U Cox , who acquired a studio flat in Great Sankey in March 2003. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Comparative homes in Great Sankey with a long lease were worth £267,600. The mid-range ground rent payable was £65 billed annually. The lease expired in 2093. Having 67 years unexpired we approximated the premium to the landlord for the lease extension to be between £14,300 and £16,400 not including legals.