Bacup leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Bacup tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bacup you should check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Bacup with in excess of one hundred years outstanding on the lease are sometimes 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 upside in buying the freehold unless savings on ground rent and service 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; |
| National Westminster Bank | Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower. |
| 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. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Bacup,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bacup valuers.
Trailing unsuccessful discussions with the freeholder of her basement flat in Bacup, Paige started the lease extension process just as the lease was coming close to the all-important eighty-year deadline. The legal work was finalised in September 2014. The landlord’s fees were kept to an absolute minimum.
Mr Liam Michel took over the lease of a one bedroom flat in Bacup in February 2011. The question was if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Comparative premises in Bacup with 100 year plus lease were in the region of £203,200. The average amount of ground rent was £65 collected yearly. The lease ended on 5 May 2084. Taking into account 61 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 plus professional charges.
Dr Nathaniel Lee acquired a garden apartment in Bacup in October 2006. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Identical residencies in Bacup with a long lease were valued about £260,000. The mid-range ground rent payable was £50 collected yearly. The lease expiry date was on 2 January 2094. Having 71 years left we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of legals.