When it comes to long leasehold property in Liverpool, you are in fact renting it for a certain period of time. Modern 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 may think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly once there are fewer than eighty years left. Anyone in Liverpool with a lease approaching 81 years remaining should seriously think of extending it sooner than later. Once a lease has under eighty years remaining, under the current Act the freeholder is entitled to calculate and charge a greater premium, based on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence 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. |
| 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. |
| Lloyds TSB Scotland | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you enhanced control over the value of your Liverpool leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of protracted negotiations with the landlord of her basement apartment in Liverpool, Rachel started the lease extension process as the eighty year deadline was fast advancing. The lease extension completed in May 2011. The landlord’s charges were kept to an absolute minimum.
In 2009 we were approached by Mr G Carter who, having moved into a first floor flat in Liverpool in August 1998. The question was if we could approximate the premium could be to prolong the lease by a further 90 years. Identical properties in Liverpool with a long lease were worth £210,000. The mid-range amount of ground rent was £50 billed annually. The lease ended in 2104. Having 79 years left we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of expenses.
Dr Sophie Campbell purchased a one bedroom flat in Liverpool in October 2006. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Comparative properties in Liverpool with a long lease were worth £275,000. The mid-range ground rent payable was £45 collected monthly. The lease finished in 2094. Given that there were 69 years remaining we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 not including costs.