Unfortunately that a Bacup residential lease is a wasting asset. As the lease term diminishes 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 Bacup property market.Once your lease nears 85ish years, you need to 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 slips under 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Bacup will be able to extend under the legislation; however a conveyancer will be able to clarify if 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 conveyancer from beginning to end of the process.
Leasehold residencies in Bacup with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 conveyancers that we work with handle Bacup 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 conveyancer we work with provide it.
Tommy was the the leasehold proprietor of a conversion flat in Bacup on the market with a lease of a few days over fifty eight years outstanding. Tommy on an informal basis contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Tommy to invoke his statutory right. Tommy obtained expert advice and secured satisfactory deal informally and sell the flat.
Last month we were approach by Mrs Rosie García , who was assigned a lease of a newly refurbished apartment in Bacup in August 2007. The dilemma was if we could approximate the price would be for a ninety year extension to my lease. Comparative premises in Bacup with 100 year plus lease were in the region of £173,800. The average ground rent payable was £60 invoiced yearly. The lease concluded on 18 August 2080. Considering the 55 years left we calculated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus legals.
Last Summer we were called by Mr Jackson Ward , who purchased a purpose-built flat in Bacup in June 2006. The question was if we could estimate the price would likely be for a ninety year extension to my lease. Identical properties in Bacup with an extended lease were in the region of £235,200. The average ground rent payable was £45 billed annually. The lease came to a finish in 2091. Given that there were 66 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus professional charges.