It’s an underpublicised certainty that a Radcliffe residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Radcliffe property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term drops below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Radcliffe will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Radcliffe 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 conveyancing solicitor we work with provide it.
Lucas was the the leasehold proprietor of a conversion apartment in Radcliffe on the market with a lease of fraction over sixty years remaining. Lucas informally approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Lucas to invoke his statutory right. Lucas procured expert advice and was able to make an informed decision and deal with the matter and sell the property.
Last year we were contacted by Mr and Mrs. P Allen , who moved into a purpose-built flat in Radcliffe in July 2002. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparable premises in Radcliffe with 100 year plus lease were in the region of £260,200. The mid-range amount of ground rent was £65 invoiced quarterly. The lease came to a finish on 15 June 2091. Given that there were 66 years outstanding we estimated the compensation to the landlord to extend the lease to be between £16,200 and £18,600 not including professional charges.
In 2010 we were e-mailed by Mr and Mrs. S Taylor who, having bought a garden flat in Radcliffe in July 1998. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Identical flats in Radcliffe with 100 year plus lease were in the region of £198,800. The average ground rent payable was £55 invoiced monthly. The lease terminated in 2080. Having 55 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £33,300 and £38,400 plus costs.