The value of Northwich leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the unexpired lease term is below than 80 years
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
Retaining our service gives you increased control over the value of your Northwich leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Harvey owned a studio flat in Northwich being marketed with a lease of a little over sixty years remaining. Harvey on an informal basis contacted his landlord a well known local-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Harvey to exercise his statutory right. Harvey procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
In 2011 we were approached by Mr and Mrs. J Morgan who, having moved into a garden flat in Northwich in October 2001. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative properties in Northwich with an extended lease were in the region of £216,000. The average amount of ground rent was £60 collected per annum. The lease expired on 16 August 2084. Having 58 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of legals.
In 2011 we were e-mailed by Dr M Martínez who, having owned a recently refurbished apartment in Northwich in May 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by 90 years. Comparative flats in Northwich with a long lease were worth £200,000. The average amount of ground rent was £50 invoiced quarterly. The lease end date was in 2104. Having 78 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 plus expenses.