It’s a harsh certainty that a Heanor residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Heanor property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher premium will be due. Most leasehold owners in Heanor will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold properties in Heanor with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Heanor leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Stanley, came seriously near to the eighty-year mark with the lease on his purpose- built flat in Heanor. Having bought his property 18 years ago, the lease term was of no significance. Thankfully, he realised he needed to take action soon on a lease extension. Stanley extended the lease just under the wire last June. Stanley and the landlord who owned the flat above subsequently settled on the final figure of £5,000 . If he failed to meet the deadline, the figure would have escalated by a minimum £1,075.
Last year we were e-mailed by Dr Samuel Bennett , who took over the lease of a one bedroom apartment in Heanor in May 2006. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable premises in Heanor with an extended lease were valued about £193,400. The mid-range amount of ground rent was £65 billed annually. The lease concluded on 1 September 2084. Given that there were 59 years as a residual term we approximated the premium to the landlord to extend the lease to be between £21,900 and £25,200 plus legals.
Mrs Robyn Murphy owned a garden flat in Heanor in January 1995. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by ninety years. Identical premises in Heanor with 100 year plus lease were in the region of £255,000. The average ground rent payable was £50 billed yearly. The lease ran out on 17 July 2095. Given that there were 70 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £10,500 and £12,000 exclusive of legals.