Rochdale leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Rochdale residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Rochdale you really ought to investigate if your lease has between 70 and 90 years remaining. There are compelling reasons why a Rochdale leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is put in place without delay
Leasehold residencies in Rochdale 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 property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Rochdale can be a difficult process. We recommend you obtain 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 a wealth of experience dealing with Rochdale lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Oscar was the the leasehold owner of a conversion apartment in Rochdale on the market with a lease of fraction over 61 years left. Oscar on an informal basis contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Oscar to invoke his statutory right. Oscar procured expert advice and was able to make an informed decision and handle with the matter and readily saleable.
Last Spring we were called by Mrs V Johnson , who owned a garden flat in Rochdale in June 1996. The dilemma was if we could approximate the premium would be to prolong the lease by ninety years. Comparative residencies in Rochdale with 100 year plus lease were worth £295,000. The mid-range amount of ground rent was £45 collected annually. The lease lapsed on 11 June 2100. Considering the 74 years outstanding we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus fees.
In 2012 we were contacted by Mr and Mrs. M González who, having owned a basement apartment in Rochdale in March 2001. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Comparable residencies in Rochdale with a long lease were in the region of £243,000. The average ground rent payable was £65 invoiced quarterly. The lease concluded in 2089. Having 63 years remaining we approximated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 not including fees.