Unfortunately that a Rochdale residential lease is a deteriorating asset. The lease value drops 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 Rochdale property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term drops below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Rochdale will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Rochdale with in excess of one hundred years outstanding 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 situations 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Retaining our service will provide you better control over the value of your Rochdale leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Ali, started to get close to the eighty-year threshold with the lease on his ground floor flat in Rochdale. Having bought his flat twenty years previously, the lease term was of minimal bearing. Thankfully, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Ali arranged for a lease extension just under the wire last May. Ali and the landlord eventually settled on a premium of £6,000 . If he had missed the deadline, the figure would have gone up by a minimum £850.
Ms S Bertrand bought a first floor flat in Rochdale in April 2010. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparable premises in Rochdale with a long lease were valued around £260,200. The mid-range amount of ground rent was £65 invoiced annually. The lease ended in 2092. Having 66 years outstanding we calculated the premium to the landlord to extend the lease to be within £15,200 and £17,600 plus fees.
Last Spring we were approach by Dr V Turner , who was assigned a lease of a purpose-built apartment in Rochdale in September 2008. We are asked if we could approximate the premium would likely be to extend the lease by 90 years. Similar premises in Rochdale with an extended lease were in the region of £198,800. The mid-range amount of ground rent was £55 collected per annum. The lease elapsed in 2081. Considering the 55 years remaining we approximated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 exclusive of costs.