The market value of a leasehold property in Old Ford is impacted by how many years the lease has remaining. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. It is ideal to start the lease extension process when a lease still has 82 years to run so that all matters can be concluded ahead of the eighty year mark. Leasehold Reform legislation entitles Old Ford qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Old Ford with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | 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. |
The lawyers that we work with procure Old Ford 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.
Freddie owned a 2 bedroom apartment in Old Ford on the market with a lease of a little over 59 years remaining. Freddie on an informal basis contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Freddie to exercise his statutory right. Freddie obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
In 2010 we were called by Mr and Mrs. I Clarke who, having acquired a ground floor flat in Old Ford in September 1997. The dilemma was if we could estimate the price would be to prolong the lease by an additional years. Comparable premises in Old Ford with 100 year plus lease were worth £210,600. The mid-range amount of ground rent was £45 invoiced quarterly. The lease terminated on 1 November 2087. Having 62 years unexpired we calculated the premium to the landlord to extend the lease to be within £18,100 and £20,800 not including legals.
An example of a Freehold Enfranchisement case for a Old Ford property is 26 Rhondda Grove in June 2009. The net price payable by the leaseholders as determined by the Tribunal was £3,015.13. This comprised £11,300 premium for the reversion less £8,284.87 costs as ordered by the County Court.