Unfortunately that a Parson Cross residential lease is a wasting 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 loss of value being disguised by increases in the Parson Cross property prices.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 falls under 80 years - otherwise a higher premium will be due. The majority of flat owners in Parson Cross will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold premises in Parson Cross with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Parson Cross 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 conveyancer we work with provide it.
Harry owned a studio apartment in Parson Cross on the market with a lease of a little over 72 years left. Harry informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £125 yearly. No ground rent would be due on a lease extension were Harry to invoke his statutory right. Harry obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
Mrs V Ricardo owned a basement flat in Parson Cross in January 2004. The question was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by a further 90 years. Comparative homes in Parson Cross with a long lease were worth £275,000. The average ground rent payable was £55 collected every twelve months. The lease expiry date was on 11 February 2101. Considering the 76 years outstanding we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including fees.
Last Christmas we were phoned by Mr and Mrs. C Hall , who bought a one bedroom apartment in Parson Cross in January 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by a further 90 years. Comparative flats in Parson Cross with 100 year plus lease were in the region of £176,200. The mid-range amount of ground rent was £65 collected annually. The lease termination date was on 3 January 2081. Taking into account 56 years remaining we approximated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 exclusive of professional charges.