The re-sale value of a leasehold property in Rochdale is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension before buying. Ideally one should start the lease extension process when the lease still has 82 years to run so that all matters can be addressed ahead of the 80 year mark. Current legislation entitles Rochdale qualifying lessees to obtain a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Rochdale with over one hundred years remaining 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 property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Rochdale,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Rochdale valuers.
In recent months Lewis, started to get close to the eighty-year mark with the lease on his two bedroom flat in Rochdale. In buying his property two decades ago, the unexpired term was of no bearing. Luckily, he recognised he would soon be paying way over the odds for Extending the lease. Lewis extended the lease at the eleventh hour in June. Lewis and the freeholder via the management company eventually agreed on the final figure of £6,000 . If he not met the deadline, the amount would have escalated by at least £975.
Mr and Mrs. U Phillips acquired a studio apartment in Rochdale in November 2009. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Comparative premises in Rochdale with 100 year plus lease were valued about £223,400. The average ground rent payable was £60 collected annually. The lease came to a finish on 26 February 2084. Taking into account 59 years as a residual term we approximated the premium to the landlord to extend the lease to be within £27,600 and £31,800 exclusive of costs.
Dr Ellie Lefèvre took over the lease of a basement apartment in Rochdale in November 2001. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Identical homes in Rochdale with 100 year plus lease were valued about £205,000. The average ground rent payable was £50 collected quarterly. The lease ended in 2104. Having 79 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.