Heckmondwike residential property held on a long lease is a depreciating asset because a leaseholder only owns the property for a set term.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you enhanced control over the value of your Heckmondwike leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Riley was the the leasehold proprietor of a 2 bedroom apartment in Heckmondwike on the market with a lease of just over fifty eight years left. Riley on an informal basis contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Riley to exercise his statutory right. Riley procured expert advice and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
Ms Abbie Walker acquired a purpose-built apartment in Heckmondwike in February 1995. The dilemma was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative homes in Heckmondwike with 100 year plus lease were valued about £210,000. The average amount of ground rent was £50 billed per annum. The lease finished in 2105. Having 80 years unexpired we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including fees.
In 2013 we were e-mailed by Ms Olivia Morgan who, having was assigned a lease of a one bedroom flat in Heckmondwike in May 1999. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar residencies in Heckmondwike with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £45 invoiced yearly. The lease expired on 6 September 2094. Having 69 years left we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including professional charges.