It’s an underpublicised truth that a Reddish residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. 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 Reddish property prices.Where your lease has approximately ninety years left, you need to 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 dips under eighty years - otherwise a higher premium will be due. The majority of flat owners in Reddish will be able to extend under the legislation; however a conveyancer should be able to confirm 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 is initiated and you will need to be guided by your conveyancer for the duration of the process.
Leasehold residencies in Reddish with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | 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. |
| Godiva Mortgages | 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. |
| 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 landlord in Reddish,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Reddish valuers.
Charlie was the the leasehold owner of a conversion flat in Reddish being sold with a lease of just over 61 years left. Charlie informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Charlie to exercise his statutory right. Charlie procured expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
In 2010 we were contacted by Mr D Nguyen who, having bought a newly refurbished flat in Reddish in January 1997. The dilemma was if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparable flats in Reddish with an extended lease were in the region of £173,800. The mid-range amount of ground rent was £65 billed every twelve months. The lease expired on 13 May 2081. Given that there were 55 years unexpired we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 plus professional charges.
In 2011 we were approached by Ms Tia Carter who, having completed a garden apartment in Reddish in September 2008. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Comparable residencies in Reddish with 100 year plus lease were in the region of £235,200. The average amount of ground rent was £45 invoiced quarterly. The lease end date was in 2092. Taking into account 66 years remaining we approximated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 plus legals.