It’s an underpublicised certainty that a Rochdale 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 deflation being disguised by increases in the Rochdale property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining dips below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Rochdale will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations 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.
Leasehold residencies in Rochdale with more than one hundred years outstanding 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 upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Rochdale 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.
Last year Jayden, started to get close to the 80-year mark with the lease on his two bedroom flat in Rochdale. Having bought his property two decades ago, the lease term was of no bearing. Luckily, he became aware that he would imminently be paying way over the odds for Extending the lease. Jayden arranged for a lease extension just ahead of time last January. Jayden and the landlord who owned the flat above eventually agreed on a premium of £6,000 . If he had missed the deadline, the sum would have escalated by at least £1,150.
Last Autumn we were called by Mrs Courtney Smith , who bought a studio apartment in Rochdale in April 2008. We are asked if we could estimate the premium could be to extend the lease by a further 90 years. Similar homes in Rochdale with 100 year plus lease were worth £257,800. The average amount of ground rent was £65 invoiced quarterly. The lease termination date was on 22 October 2091. Taking into account 65 years remaining we calculated the premium to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of professional charges.
Last Christmas we were e-mailed by Mr and Mrs. H Ward , who acquired a purpose-built flat in Rochdale in March 2002. The question was if we could estimate the premium would be for a ninety year lease extension. Identical homes in Rochdale with 100 year plus lease were valued around £191,400. The average ground rent payable was £55 invoiced yearly. The lease expired on 25 June 2080. Given that there were 54 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £34,200 and £39,600 plus legals.