Unfortunately that a Northwich residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Northwich property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining drops under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Northwich will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold properties in Northwich with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
The conveyancers that we work with handle Northwich lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
During the course of the last few months Blake, started to get near to the 80-year mark with the lease on his first floor apartment in Northwich. Having purchased his flat two decades ago, the unexpired term was of no bearing. by good luck, he noticed he would imminently be paying an escalated premium for Extending the lease. Blake arranged for a lease extension just under the wire last April. Blake and the freeholder eventually settled on an amount of £5,000 . If the lease had gone lower than eighty years, the sum would have increased by at least £975.
In 2009 we were contacted by Mr and Mrs. U Gómez who, having purchased a one bedroom apartment in Northwich in September 2003. The question was if we could estimate the price could be to prolong the lease by ninety years. Identical properties in Northwich with 100 year plus lease were worth £205,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease elapsed in 2104. Considering the 79 years outstanding we estimated the compensation to the landlord for the lease extension to be within £7,600 and £8,800 exclusive of costs.
In 2013 we were phoned by Mr and Mrs. U Sharif who, having bought a ground floor flat in Northwich in September 2012. We are asked if we could estimate the premium could be to extend the lease by ninety years. Comparable homes in Northwich with an extended lease were in the region of £270,000. The mid-range amount of ground rent was £65 invoiced quarterly. The lease concluded on 5 February 2093. Taking into account 68 years left we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including costs.