The market value of a leasehold property in Disley is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should expect problems on re-sale, so it is advisable to arrange for a lease extension prior to buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that a lease extension can be addressed well before the 80 year threshold. Statute enables Disley qualifying lessees to an additional term of 90 years in addition to the remaining term, at a notional rent (no ground rent). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Disley with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date 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. |
The conveyancing solicitors that we work with procure Disley 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.
After protracted discussions with the freeholder of her first floor apartment in Disley, Jade initiated the lease extension process just as her lease was approaching the crucial 80-year mark. The legal work was concluded in June 2008. The freeholder’s fees were kept to an absolute minimum.
Mr A Carter bought a purpose-built apartment in Disley in May 2005. We are asked if we could approximate the premium would be to prolong the lease by a further 90 years. Similar homes in Disley with 100 year plus lease were in the region of £208,600. The average ground rent payable was £60 invoiced monthly. The lease came to a finish on 25 November 2083. Having 57 years left we estimated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 exclusive of professional charges.
In 2014 we were approached by Mrs K François who, having bought a one bedroom apartment in Disley in May 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Identical homes in Disley with an extended lease were worth £200,000. The average ground rent payable was £50 invoiced monthly. The lease ran out in 2103. Taking into account 77 years as a residual term we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus legals.