It’s a harsh truth that a Westhoughton residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Westhoughton property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining slips under 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Westhoughton will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold properties in Westhoughton with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| 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. |
The conveyancers that we work with handle Westhoughton 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 conveyancing solicitor we work with provide it.
In recent months Sam, came very near to the eighty-year mark with the lease on his purpose- built apartment in Westhoughton. In buying his flat twenty years ago, the lease term was of no concern. Luckily, he recognised he needed to take action soon on Extending the lease. Sam was able to extend his lease just under the wire in June. Sam and the landlord who owned the flat above ultimately agreed on sum of £5,000 . If he had missed the deadline, the premium would have become more costly by at least £1,125.
In 2009 we were approached by Mr T Bertrand who, having acquired a one bedroom apartment in Westhoughton in October 2012. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by ninety years. Similar residencies in Westhoughton with a long lease were worth £260,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease expired on 20 February 2097. Considering the 72 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of expenses.
Last Winter we were contacted by Ms Sophie Allen , who moved into a newly refurbished apartment in Westhoughton in May 1996. We are asked if we could approximate the premium could be to extend the lease by an additional years. Comparable premises in Westhoughton with a long lease were in the region of £256,600. The average ground rent payable was £60 invoiced quarterly. The lease elapsed on 14 January 2077. Taking into account 52 years remaining we estimated the premium to the freeholder for the lease extension to be within £41,800 and £48,400 exclusive of expenses.