It’s a harsh truth that a Sale residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Sale property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term slips below 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 Most flat owners in Sale will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold premises in Sale with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Sale 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 lawyer we work with provide it.
Nathaniel owned a studio apartment in Sale on the market with a lease of a little over sixty years outstanding. Nathaniel informally contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Nathaniel to invoke his statutory right. Nathaniel procured expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Dr O Anderson completed a one bedroom apartment in Sale in March 2007. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Identical premises in Sale with 100 year plus lease were in the region of £200,800. The mid-range ground rent payable was £65 invoiced monthly. The lease expired on 14 April 2085. Considering the 60 years as a residual term we calculated the premium to the landlord for the lease extension to be between £20,900 and £24,200 exclusive of fees.
Mr and Mrs. M Davies acquired a basement apartment in Sale in August 1996. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Identical flats in Sale with a long lease were in the region of £255,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease elapsed in 2096. Considering the 71 years left we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of legals.