When it comes to long leasehold property in Hulme, you are actually purchasing a right to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive especially when there are fewer than 80 years remaining. Anyone in Hulme with a lease approaching 81 years unexpired should seriously think of extending it sooner rather than later. When a lease has less than 80 years outstanding, under the current Act the landlord can calculate and demand a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| Yorkshire 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. |
The lawyers that we work with handle Hulme 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.
Joseph was the the leasehold proprietor of a high value apartment in Hulme being sold with a lease of fraction over fifty eight years unexpired. Joseph on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Joseph to exercise his statutory right. Joseph obtained expert advice and was able to make an informed decision and deal with the matter and readily saleable.
In 2011 we were e-mailed by Mr Lewis Patel who, having bought a one bedroom flat in Hulme in January 1996. The dilemma was if we could shed any light on how much (approximately) premium could be to prolong the lease by a further 90 years. Similar properties in Hulme with an extended lease were worth £233,200. The mid-range ground rent payable was £60 invoiced annually. The lease lapsed on 23 November 2086. Taking into account 61 years remaining we approximated the compensation to the freeholder for the lease extension to be within £22,800 and £26,400 plus expenses.
In 2011 we were called by Mr and Mrs. A Davis who, having owned a garden flat in Hulme in August 2002. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Hulme with an extended lease were valued around £166,800. The mid-range ground rent payable was £50 billed annually. The lease termination date was in 2075. Considering the 50 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £32,300 and £37,400 not including costs.