It’s a harsh truth that a Walkden residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Walkden property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining slips below 80 years, you will then be required to pay 50% 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 The majority of leasehold owners in Walkden will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the process.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
|Leeds Building Society
|85 years remaining from the start of the mortgage.
| 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.
|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
|85 years at the time of completion. If it's less, we require it to be extended on or before completion.
|Yorkshire 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.
Retaining our service gives you increased control over the value of your Walkden leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Hugo, came seriously near to the 80-year mark with the lease on his studio flat in Walkden. In buying his home 18 years ago, the length of the lease was of minimal importance. As luck would have it, he recognised he would soon be paying an escalated premium for Extending the lease. Hugo extended the lease just under the wire last April. Hugo and the landlord who owned the flat above eventually settled on an amount of £5,500 . If the lease had slipped to less than 80 years, the price would have escalated by at least £1,100.
Mr Alfie Alexander took over the lease of a purpose-built flat in Walkden in September 2011. The dilemma was if we could estimate the premium could be for a 90 year lease extension. Similar residencies in Walkden with 100 year plus lease were in the region of £265,000. The average ground rent payable was £50 invoiced yearly. The lease concluded in 2097. Having 73 years left we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.
In 2009 we were e-mailed by Mrs Grace Rivera who, having completed a garden flat in Walkden in June 2012. The question was if we could estimate the premium would likely be to extend the lease by 90 years. Comparative premises in Walkden with an extended lease were in the region of £264,000. The mid-range ground rent payable was £60 collected monthly. The lease ended in 2077. Given that there were 53 years remaining we calculated the compensation to the freeholder to extend the lease to be within £37,100 and £42,800 exclusive of legals.