It’s an underpublicised certainty that a Cheetham Hill residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Cheetham Hill property prices.Where your lease has approximately 90 years left, you should 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 dips lower than eighty years - otherwise a higher amount will be payable. Most leasehold owners in Cheetham Hill will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. 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 conveyancer for the duration of the formalities.
Leasehold residencies in Cheetham Hill with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
Retaining our service will provide you better control over the value of your Cheetham Hill leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Muhammad, started to get near to the eighty-year threshold with the lease on his ground floor apartment in Cheetham Hill. Having purchased his home two decades ago, the lease term was of little bearing. Luckily, he became aware that he needed to take action soon on a lease extension. Muhammad was able to extend his lease at the eleventh hour in June. Muhammad and the landlord who owned the flat above in the end agreed on a premium of £6,000 . If the lease had slipped lower than 80 years, the figure would have increased by a minimum £1,100.
Mr and Mrs. O Ramírez acquired a one bedroom apartment in Cheetham Hill in July 1999. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Comparative properties in Cheetham Hill with a long lease were worth £254,200. The mid-range amount of ground rent was £60 invoiced per annum. The lease ended in 2077. Given that there were 51 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £43,700 and £50,600 not including professional charges.
Mr I Alexander was assigned a lease of a purpose-built flat in Cheetham Hill in May 2006. We are asked if we could estimate the premium would be to extend the lease by ninety years. Comparable premises in Cheetham Hill with an extended lease were in the region of £210,600. The average amount of ground rent was £45 collected per annum. The lease elapsed on 7 September 2088. Having 62 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 not including expenses.