It’s an underpublicised truth that a Salford 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 early years due to the deflation being disguised by increases in the Salford property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining dips 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 extra value that a lease extension will add the property Most leasehold owners in Salford will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in Salford with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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 Salford,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Salford valuers.
Luca was the the leasehold owner of a conversion flat in Salford being marketed with a lease of just over 59 years unexpired. Luca on an informal basis approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Luca to exercise his statutory right. Luca obtained expert legal guidance and secured satisfactory deal without resorting to tribunal and sell the property.
In 2013 we were approached by Dr U Brown who, having was assigned a lease of a basement flat in Salford in November 1996. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Comparative flats in Salford with 100 year plus lease were valued around £173,800. The mid-range amount of ground rent was £60 invoiced per annum. The lease came to a finish in 2080. Given that there were 55 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including legals.
Last Summer we were approach by Mr and Mrs. R Young , who completed a first floor flat in Salford in January 2009. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparable premises in Salford with an extended lease were valued around £235,200. The average ground rent payable was £45 invoiced monthly. The lease ended in 2091. Having 66 years outstanding we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.