It’s an underpublicised truth that a Madeley residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Madeley property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher amount will be payable. Most flat owners in Madeley will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Madeley with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Madeley,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Madeley valuers.
In the wake of 6 months of lengthy discussions with the freeholder of her first floor apartment in Madeley, Phoebe commenced the lease extension process just as her lease was approaching the crucial 80-year deadline. The legal work completed in February 2005. The landlord’s charges were negotiated to a tad over 550 GBP.
Last Christmas we were phoned by Mr and Mrs. H Carter , who took over the lease of a newly refurbished apartment in Madeley in April 1999. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Comparable flats in Madeley with 100 year plus lease were in the region of £225,800. The average ground rent payable was £60 invoiced yearly. The lease terminated in 2085. Taking into account 60 years outstanding we estimated the compensation to the landlord to extend the lease to be within £25,700 and £29,600 exclusive of costs.
In 2010 we were e-mailed by Dr Aimee Edwards who, having was assigned a lease of a purpose-built apartment in Madeley in September 2007. The question was if we could estimate the premium would likely be for a ninety year lease extension. Similar homes in Madeley with a long lease were worth £210,000. The average ground rent payable was £50 collected per annum. The lease ended on 19 October 2105. Considering the 80 years outstanding we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus professional charges.