It’s a harsh truth that a Salford residential lease is a deteriorating asset. As the lease term reduces 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 Salford property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining slips below eighty 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 additional value that a lease extension will add the property Most leasehold owners in Salford will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Salford can be a difficult process. We recommend you obtain professional help from a conveyancer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Salford lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Kyle owned a studio apartment in Salford on the market with a lease of just over 72 years remaining. Kyle on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Kyle to invoke his statutory right. Kyle procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
Dr Y Girard took over the lease of a one bedroom flat in Salford in August 2000. We are asked if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Identical premises in Salford with a long lease were in the region of £191,000. The average ground rent payable was £65 collected per annum. The lease lapsed on 12 June 2084. Considering the 58 years remaining we estimated the compensation to the freeholder for the lease extension to be between £23,800 and £27,400 plus fees.
Mrs Bethan Bennett took over the lease of a basement flat in Salford in September 2007. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Comparative homes in Salford with 100 year plus lease were worth £250,000. The mid-range amount of ground rent was £50 billed per annum. The lease ended in 2095. Given that there were 69 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including fees.