Unfortunately that a Cleckheaton residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Cleckheaton property market.Where your lease has approximately ninety years left, you should 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 falls under 80 years - otherwise a higher amount will be payable. Most leasehold owners in Cleckheaton will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in Cleckheaton with over one hundred years remaining 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 to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Cleckheaton leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Arthur, came dangerously near to the eighty-year threshold with the lease on his first floor apartment in Cleckheaton. In buying his flat two decades ago, the lease term was of little relevance. As luck would have it, he became aware that he needed to take action soon on Extending the lease. Arthur arranged for a lease extension just ahead of time in September. Arthur and the landlord who owned the flat above eventually agreed on an amount of £6,000 . If he failed to meet the deadline, the sum would have gone up by at least £975.
In 2013 we were contacted by Dr J Hill who, having bought a purpose-built apartment in Cleckheaton in April 2010. We are asked if we could approximate the price would be to extend the lease by an additional years. Comparative homes in Cleckheaton with 100 year plus lease were in the region of £280,000. The average amount of ground rent was £45 collected per annum. The lease expired on 19 October 2095. Taking into account 70 years remaining we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.
Ms Isobel Wood purchased a newly refurbished apartment in Cleckheaton in October 2004. The question was if we could approximate the price would likely be to prolong the lease by 90 years. Similar homes in Cleckheaton with an extended lease were valued around £223,400. The mid-range amount of ground rent was £60 billed annually. The lease ran out in 2084. Having 59 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £27,600 and £31,800 exclusive of legals.