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Why you should start your Wigan lease extension


Why you should commence your Wigan lease extension today:

A Wigan lease depreciates with the years remaining on the lease.

Wigan leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Most owners of residential leasehold property in Wigan enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Wigan you really ought to check if your lease has between 70 and ninety years left. There are compelling reasons why a Wigan flat owner with a lease having around 80 years left should take action to make sure that a lease extension is actioned without delay

Wigan property with a lease extension is almost the same value as a freehold

Leasehold properties in Wigan with over 100 years unexpired on the lease are sometimes 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 upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.

Banks and Building Societies will not issue a mortgage on a short lease

The propensity since 2008 has been for mortgage companies to tighten lending requirements across the board - this has extended to the types of security over which the home loan is to be charged. This has meant the unexpired lease term required by lenders has increased. Historically banks would lend on a lease with 25 years plus the term of the loan - typically 50 year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many now have a minimum term of 75 years as a prerequisite.

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.
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.
National Westminster Bank Mortgage term plus 30 years.
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
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.

Why use us for your lease extension in Wigan?

The conveyancing solicitors that we work with undertake Wigan 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.

Wigan Lease Extension Example Cases:

Aaron, Wigan, Greater Manchester,

Aaron owned a high value apartment in Wigan being sold with a lease of a little over 72 years remaining. Aaron on an informal basis spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be due on a lease extension were Aaron to invoke his statutory right. Aaron procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.

Wigan case:

Ms Alice González purchased a newly refurbished flat in Wigan in May 2005. We are asked if we could approximate the price would be for a 90 year extension to my lease. Similar homes in Wigan with an extended lease were in the region of £176,200. The mid-range amount of ground rent was £65 invoiced yearly. The lease concluded on 3 January 2080. Having 56 years remaining we approximated the compensation to the freeholder for the lease extension to be between £29,500 and £34,000 plus costs.

Wigan case:

Dr G Martinez took over the lease of a newly refurbished apartment in Wigan in April 2010. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Similar homes in Wigan with a long lease were in the region of £242,600. The mid-range ground rent payable was £45 invoiced quarterly. The lease came to a finish in 2091. Taking into account 67 years unexpired we estimated the premium to the landlord to extend the lease to be within £11,400 and £13,200 exclusive of legals.