When it comes to domestic leasehold premises in Heaton, you are actually buying a right to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive especially when there are less than 80 years left. Leasehold owners in Heaton with a lease nearing 81 years left should seriously consider extending it without delay. When a lease has fewer than 80 years outstanding, under the relevant legislation the landlord is entitled to calculate and demand a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold residencies in Heaton with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
Engaging our service will provide you enhanced control over the value of your Heaton leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful negotiations with the landlord of her two bedroom apartment in Heaton, Morgan initiated the lease extension process just as the lease was coming close to the critical 80-year threshold. The transaction completed in September 2011. The freeholder’s costs were restricted to less than 550 GBP.
In 2010 we were contacted by Dr R Murphy who, having moved into a recently refurbished apartment in Heaton in March 2005. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Identical residencies in Heaton with a long lease were in the region of £216,000. The mid-range amount of ground rent was £60 billed every twelve months. The lease ended in 2084. Given that there were 58 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 not including costs.
In 2011 we were called by Mr and Mrs. V White who, having acquired a purpose-built apartment in Heaton in January 2011. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Similar properties in Heaton with a long lease were in the region of £200,000. The average ground rent payable was £50 billed yearly. The lease finished on 28 April 2104. Having 78 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.