There is no doubt about it a leasehold flat or house in Bardsley is a wasting asset as a result of the diminishing lease term. If the residual term has, more than 100 years to run then this decrease may be negligible that being said there will become a point in time when a lease has under than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary rational as to why you should consider extending sooner than later. Most flat owners in Bardsley will meet the qualifying criteria; however a conveyancing solicitor can advise whether you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Bardsley 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 conveyancing solicitor we work with provide it.
Jacob was the the leasehold owner of a 2 bedroom flat in Bardsley on the market with a lease of just over sixty years unexpired. Jacob on an informal basis spoke with his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Jacob to exercise his statutory right. Jacob obtained expert advice and secured satisfactory resolution without going to tribunal and sell the flat.
Last year we were e-mailed by Mr and Mrs. U Lambert , who was assigned a lease of a purpose-built apartment in Bardsley in October 2007. The question was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by an additional years. Comparative flats in Bardsley with an extended lease were worth £198,800. The average ground rent payable was £55 billed every twelve months. The lease ended on 19 June 2081. Taking into account 55 years remaining we calculated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of legals.
In 2010 we were phoned by Mr and Mrs. I Fournier who, having acquired a purpose-built apartment in Bardsley in November 1997. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Identical flats in Bardsley with an extended lease were worth £300,000. The average amount of ground rent was £50 collected annually. The lease expiry date was in 2101. Taking into account 75 years remaining we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.