It’s an underpublicised truth that a Irlam residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Irlam property market.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 falls lower than eighty years - otherwise a higher amount will be payable. Most flat owners in Irlam will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Irlam can be a difficult process. We recommend you procure guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Irlam lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Isaac was the the leasehold owner of a conversion apartment in Irlam on the market with a lease of a few days over fifty eight years left. Isaac on an informal basis spoke with his freeholder being a well known London-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 on the basis of a rise in the rent to £100 yearly. No ground rent would be due on a lease extension were Isaac to invoke his statutory right. Isaac procured expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
In 2011 we were called by Mrs Hollie Simon who, having moved into a first floor flat in Irlam in May 2011. The question was if we could estimate the price would likely be to prolong the lease by ninety years. Comparative flats in Irlam with an extended lease were in the region of £275,000. The mid-range amount of ground rent was £55 invoiced quarterly. The lease lapsed on 10 August 2101. Having 76 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of legals.
Last Christmas we were contacted by Dr I Sánchez , who owned a ground floor apartment in Irlam in August 2012. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparable premises in Irlam with 100 year plus lease were in the region of £176,200. The average ground rent payable was £65 billed annually. The lease terminated in 2081. Considering the 56 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £29,500 and £34,000 exclusive of legals.