Chances are that where you own a flat in Handforth you actually own a long leasehold interest over your property
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Chelsea 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. |
| 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 |
The conveyancers that we work with handle Handforth 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.
Muhammad was the the leasehold owner of a 2 bedroom apartment in Handforth being sold with a lease of a little over 59 years outstanding. Muhammad on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Muhammad to exercise his statutory right. Muhammad procured expert legal guidance and secured an acceptable deal informally and readily saleable.
In 2009 we were e-mailed by Dr Oscar Taylor who, having purchased a first floor flat in Handforth in November 1997. The dilemma was if we could approximate the price would likely be for a ninety year lease extension. Similar residencies in Handforth with 100 year plus lease were valued about £205,000. The mid-range ground rent payable was £50 invoiced per annum. The lease ended on 4 November 2103. Given that there were 78 years left we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus fees.
In 2011 we were called by Dr Leo Petit who, having purchased a one bedroom apartment in Handforth in March 1999. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparative flats in Handforth with a long lease were worth £267,600. The average amount of ground rent was £65 billed monthly. The lease lapsed in 2092. Taking into account 67 years left we calculated the compensation to the landlord to extend the lease to be within £14,300 and £16,400 exclusive of legals.