It’s a harsh truth that a Bacup 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 reduction being disguised by increases in the Bacup property market.Once your lease gets to 85ish years, you need to start thinking about 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 eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Bacup will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold residencies in Bacup with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
Regardless of whether you are a tenant or a freeholder in Bacup,the lease extension lawyers 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.
After unsuccessful negotiations with the landlord of her first floor flat in Bacup, Niamh initiated the lease extension process as the eighty year mark was quickly approaching. The legal work was concluded in February 2011. The landlord’s fees were kept to an absolute minimum.
In 2013 we were contacted by Mr and Mrs. N Martinez who, having moved into a purpose-built flat in Bacup in July 1995. The question was if we could approximate the price would be for a 90 year lease extension. Comparative homes in Bacup with 100 year plus lease were in the region of £260,000. The mid-range ground rent payable was £50 collected yearly. The lease termination date was in 2098. Taking into account 72 years unexpired we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus costs.
Last Christmas we were phoned by Mr and Mrs. F Kelly , who was assigned a lease of a one bedroom flat in Bacup in May 1995. The question was if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative flats in Bacup with an extended lease were valued about £256,600. The average amount of ground rent was £60 billed quarterly. The lease lapsed in 2078. Given that there were 52 years outstanding we calculated the compensation to the landlord to extend the lease to be between £39,000 and £45,000 exclusive of expenses.