It’s an underpublicised truth that a Knotty Ash residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Knotty Ash property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term drops below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Knotty Ash will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
Leasehold residencies in Knotty Ash with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Knotty Ash,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Knotty Ash valuers.
Aarav was the the leasehold proprietor of a studio flat in Knotty Ash being marketed with a lease of a little over fifty eight years left. Aarav informally contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Aarav to invoke his statutory right. Aarav obtained expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Dr Chantelle Green bought a basement apartment in Knotty Ash in July 2012. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Identical residencies in Knotty Ash with 100 year plus lease were valued around £189,000. The average ground rent payable was £55 billed monthly. The lease expired on 10 September 2079. Taking into account 53 years as a residual term we calculated the premium to the landlord for the lease extension to be within £28,500 and £33,000 exclusive of professional charges.
Mr L Lefèvre bought a newly refurbished apartment in Knotty Ash in May 2009. The dilemma was if we could approximate the premium would be to extend the lease by 90 years. Similar flats in Knotty Ash with an extended lease were valued about £290,000. The average amount of ground rent was £45 invoiced per annum. The lease expiry date was on 25 January 2099. Having 73 years left we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.