The market value of Heckington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate substantially once the unexpired lease term is below than 80 years
Leasehold properties in Heckington with in excess of 100 years left 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 purchasing the reversionary interest unless savings on ground rent and estate charges merit 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. |
| Halifax | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Heckington lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Evan was the the leasehold proprietor of a 2 bedroom flat in Heckington on the market with a lease of just over 59 years unexpired. Evan informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Evan to exercise his statutory right. Evan obtained expert legal guidance and was able to make a more informed decision and handle with the matter and sell the flat.
In 2014 we were phoned by Mr and Mrs. V Hall who, having bought a one bedroom flat in Heckington in May 1996. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative properties in Heckington with an extended lease were in the region of £242,600. The mid-range ground rent payable was £45 collected every twelve months. The lease terminated on 21 August 2093. Having 67 years remaining we estimated the premium to the landlord to extend the lease to be between £11,400 and £13,200 plus fees.
Mr M Evans moved into a ground floor flat in Heckington in April 2000. We are asked if we could estimate the premium would likely be to prolong the lease by an additional years. Comparable properties in Heckington with 100 year plus lease were in the region of £280,000. The average amount of ground rent was £55 collected monthly. The lease expired on 8 October 2104. Taking into account 78 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of expenses.