The re-sale value of a leasehold property in Stalybridge depends on how many years the lease has remaining. If it is close to or less than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the process of extending the lease is when a lease still has 82 years to run so that formalities can be concluded in advance of the eighty year cut off point. Current legislation entitles Stalybridge qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Stalybridge with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
The lawyers that we work with handle Stalybridge 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 conveyancer we work with provide it.
Archie owned a 2 bedroom flat in Stalybridge being marketed with a lease of just over fifty eight years left. Archie on an informal basis contacted his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Archie to invoke his statutory right. Archie obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2012 we were e-mailed by Mr Samuel Mitchell who, having acquired a basement apartment in Stalybridge in February 1996. We are asked if we could estimate the premium would be to extend the lease by ninety years. Comparable premises in Stalybridge with 100 year plus lease were in the region of £246,800. The average ground rent payable was £60 billed monthly. The lease expired on 7 March 2076. Given that there were 50 years left we estimated the compensation to the landlord for the lease extension to be between £44,700 and £51,600 exclusive of legals.
Last October we were called by Mr and Mrs. O David , who was assigned a lease of a studio apartment in Stalybridge in February 1995. The dilemma was if we could approximate the price could be for a 90 year extension to my lease. Identical residencies in Stalybridge with a long lease were worth £208,200. The average amount of ground rent was £65 collected annually. The lease concluded in 2087. Having 61 years unexpired we approximated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 not including fees.