The re-sale value of a leasehold property in Heywood is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when the lease still has 82 years remaining so that a lease extension can be concluded in advance of the eighty year mark. Leasehold Reform legislation entitles Heywood qualifying lessees to an additional term of 90 years on top of the remaining term, at a peppercorn rent (no ground rent). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Heywood 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 lawyer we work with provide it.
Last October James, started to get near to the 80-year threshold with the lease on his purpose- built flat in Heywood. Having bought his property 18 years ago, the lease term was of no importance. Thankfully, he noticed he would imminently be paying an inflated amount for a lease extension. James arranged for a lease extension at the eleventh hour in August. James and the landlord who owned the flat above eventually agreed on sum of £5,000 . If he had missed the deadline, the sum would have become more exhorbitant by a minimum £875.
Last Christmas we were contacted by Mrs Ella Bonnet , who purchased a garden apartment in Heywood in July 2002. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparative homes in Heywood with an extended lease were valued around £200,800. The mid-range amount of ground rent was £65 billed monthly. The lease expiry date was on 3 January 2085. Taking into account 60 years unexpired we calculated the compensation to the landlord for the lease extension to be between £20,900 and £24,200 plus expenses.
Mr and Mrs. I Ramírez completed a garden flat in Heywood in February 2002. The dilemma was if we could estimate the premium would likely be to extend the lease by an additional years. Comparable residencies in Heywood with 100 year plus lease were worth £260,000. The average amount of ground rent was £50 invoiced yearly. The lease ended on 17 March 2096. Given that there were 71 years remaining we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including expenses.