Barnoldswick leases on residential properties are gradually losing 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. Legislation has been in place for sometime now which permits qualifying Barnoldswick residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Barnoldswick you should check if your lease has between 70 and 90 years remaining. There are compelling reasons why a Barnoldswick leaseholder with a lease having around 80 years left should take action to ensure that a lease extension is actioned without delay
Leasehold properties in Barnoldswick with in excess of 100 years outstanding on the lease are often 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 justify it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Engaging our service will provide you increased control over the value of your Barnoldswick leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Jude, came perilously close to the eighty-year threshold with the lease on his ground floor flat in Barnoldswick. In buying his flat two decades ago, the lease term was of no concern. Thankfully, he became aware that he would soon be paying way over the odds for a lease extension. Jude extended the lease just under the wire in August. Jude and the freeholder ultimately settled on an amount of £6,000 . If the lease had descended lower than eighty years, the premium would have become more costly by at least £1,050.
In 2014 we were e-mailed by Dr Andrew Richardson who, having took over the lease of a garden apartment in Barnoldswick in June 2008. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Similar properties in Barnoldswick with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 billed yearly. The lease lapsed on 2 March 2084. Given that there were 58 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of legals.
In 2011 we were approached by Dr J Smith who, having took over the lease of a purpose-built apartment in Barnoldswick in November 2009. The question was if we could shed any light on how much (approximately) price would be to extend the lease by a further 90 years. Similar properties in Barnoldswick with a long lease were in the region of £200,000. The average ground rent payable was £50 invoiced quarterly. The lease lapsed in 2104. Given that there were 78 years left we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.