It’s a harsh certainty that a Heywood residential lease is a deteriorating asset. As the lease term reduces 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 Heywood property market.Where your lease has approximately ninety years left, you need to start thinking about 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 falls under 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Heywood will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
Leasehold premises in Heywood with more than 100 years unexpired 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 purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Heywood leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing unsuccessful discussions with the landlord of her basement apartment in Heywood, Melissa initiated the lease extension process just as the lease was coming close to the all-important eighty-year deadline. The legal work was finalised in January 2014. The landlord’s fees were kept to an absolute minimum.
In 2010 we were phoned by Dr Gabriel Harris who, having acquired a garden apartment in Heywood in November 2004. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative residencies in Heywood with a long lease were valued around £270,000. The mid-range amount of ground rent was £55 billed monthly. The lease terminated on 2 July 2100. Taking into account 75 years left we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including fees.
Last Christmas we were e-mailed by Mr and Mrs. I Nguyen , who moved into a recently refurbished flat in Heywood in August 1998. The question was if we could estimate the premium would be for a 90 year lease extension. Comparative premises in Heywood with an extended lease were in the region of £173,800. The average amount of ground rent was £65 collected annually. The lease elapsed on 5 April 2080. Given that there were 55 years left we calculated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 not including legals.