Droylsden leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Droylsden residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Droylsden you would be well advised to check if your lease has between 70 and 90 years left. There are compelling reasons why a Droylsden leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is put in place without delay
Leasehold residencies in Droylsden with in excess of 100 years outstanding on the lease are often referred to as ‘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 to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancing solicitors that we work with undertake Droylsden 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 lawyer we work with provide it.
After protracted discussions with the freeholder of her first floor flat in Droylsden, Samantha commenced the lease extension process as the eighty year deadline was fast approaching. The lease extension was concluded in April 2006. The freeholder’s fees were restricted to a tad over 450 GBP.
In 2010 we were phoned by Ms B Baker who, having bought a purpose-built flat in Droylsden in May 1998. The dilemma was if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparative properties in Droylsden with 100 year plus lease were valued around £189,000. The mid-range ground rent payable was £55 collected annually. The lease ran out in 2078. Considering the 53 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 not including expenses.
Last Autumn we were e-mailed by Mr K González , who bought a newly refurbished apartment in Droylsden in April 2007. The question was if we could estimate the premium would likely be for a ninety year lease extension. Comparative properties in Droylsden with a long lease were in the region of £290,000. The mid-range ground rent payable was £45 invoiced yearly. The lease came to a finish in 2098. Having 73 years unexpired we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.