It’s a harsh certainty that a Salford residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Salford property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher amount will be payable. The majority of flat owners in Salford will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is generally accepted that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you enhanced control over the value of your Salford leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful discussions with the landlord of her two bedroom flat in Salford, Daisy commenced the lease extension process as the 80 year threshold was rapidly nearing. The legal work was concluded in November 2008. The landlord’s costs were restricted to less than 700 pounds.
Last Winter we were called by Mr and Mrs. H Morris , who took over the lease of a one bedroom apartment in Salford in April 2006. The dilemma was if we could estimate the price would likely be to prolong the lease by an additional years. Similar flats in Salford with 100 year plus lease were in the region of £225,400. The mid-range ground rent payable was £45 invoiced annually. The lease concluded on 9 January 2089. Given that there were 64 years left we estimated the premium to the landlord for the lease extension to be within £15,200 and £17,600 not including legals.
Last Summer we were contacted by Mrs I Gómez , who moved into a ground floor flat in Salford in February 2008. The question was if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Identical residencies in Salford with 100 year plus lease were valued about £270,000. The mid-range amount of ground rent was £55 billed annually. The lease expired in 2100. Taking into account 75 years as a residual term we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus legals.