Mancot leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Mancot residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Mancot you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a landlord in Mancot,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Mancot valuers.
Logan owned a conversion apartment in Mancot being marketed with a lease of a few days over 72 years left. Logan informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Logan to exercise his statutory right. Logan procured expert legal guidance and secured satisfactory resolution informally and sell the property.
Last year we were phoned by Mr and Mrs. R Lewis , who acquired a ground floor flat in Mancot in June 2004. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable flats in Mancot with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease elapsed in 2098. Considering the 73 years outstanding we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including costs.
Mr and Mrs. Y Harris bought a recently refurbished apartment in Mancot in November 2005. We are asked if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Identical flats in Mancot with a long lease were worth £240,600. The average ground rent payable was £60 billed every twelve months. The lease finished in 2087. Having 62 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 not including fees.