Owning a flat usually means owning a lease of the property, which has a set term of years. This lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Middleton. Inevitably, the term of lease remaining shortens as time goes by. This may slip by relatively unnoticed when the residence has to be sold or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Middleton have the legal entitlement to extend the lease for a further 90 years in accordance with Leasehold Reform legislation. Please give due attention before putting off your Middleton lease extension. Putting off that expense now simply increases the price you will eventually have to pay to extend your lease
Leasehold residencies in Middleton with in excess of one hundred years unexpired 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 justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Middleton leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kyle was the the leasehold owner of a 2 bedroom apartment in Middleton being marketed with a lease of a little over sixty years left. Kyle on an informal basis approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 per annum. No ground rent would be payable on a lease extension were Kyle to invoke his statutory right. Kyle obtained expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
Last Spring we were approach by Mr and Mrs. M Roberts , who owned a first floor apartment in Middleton in July 2006. We are asked if we could approximate the price could be to prolong the lease by a further 90 years. Comparable premises in Middleton with an extended lease were valued around £183,600. The average amount of ground rent was £65 invoiced every twelve months. The lease ended on 15 May 2082. Taking into account 57 years unexpired we approximated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 plus legals.
In 2009 we were approached by Ms Aimee Bernard who, having bought a recently refurbished apartment in Middleton in May 2011. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Identical residencies in Middleton with a long lease were valued about £245,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease elapsed on 5 September 2093. Given that there were 68 years outstanding we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus fees.