With a domestic leasehold property in Hulme, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should consider extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater notably once there are fewer than 80 years left. Leasehold owners in Hulme with a lease nearing 81 years unexpired should seriously think of extending it as soon as possible. When a lease has fewer than 80 years remaining, under the current statute the landlord can calculate and charge a larger amount, based on a technical multiplication, known as “marriage value” which is payable.
Leasehold properties in Hulme with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Hulme,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Hulme valuers.
Last year Alexander, started to get close to the 80-year threshold with the lease on his one bedroom flat in Hulme. In buying his property two decades ago, the unexpired term was of no bearing. Fortunately, he recognised he needed to take action soon on Extending the lease. Alexander extended the lease just ahead of time last January. Alexander and the landlord in the end settled on a premium of £5,000 . If he not met the deadline, the figure would have gone up by at least £850.
Last Spring we were contacted by Mr C Hill , who bought a purpose-built flat in Hulme in October 2003. We are asked if we could estimate the premium would be for a ninety year lease extension. Similar properties in Hulme with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £65 collected per annum. The lease ran out in 2093. Having 68 years outstanding we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of expenses.
Mr Isaac James purchased a purpose-built apartment in Hulme in July 2006. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Similar residencies in Hulme with an extended lease were worth £208,600. The mid-range amount of ground rent was £60 billed annually. The lease concluded on 9 June 2082. Given that there were 57 years left we calculated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 plus fees.