Heckmondwike Lease Extension - Free Consultation

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Why you should commence your Heckmondwike lease extension


Main reasons to start your Heckmondwike lease extension today:

A Heckmondwike leasehold property depreciates with the years remaining on the lease.

Heckmondwike leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Heckmondwike tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Heckmondwike you would be well advised to see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value

Heckmondwike property with a lease extension has roughly the same value as a freehold

It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.

Lending institutions will not issue a mortgage on a short lease

Nearly all banks and building societies insist on a lengthy amount of time remaining on a leasehold residence before they will consider it as adequate security. Regardless of whether you need a mortgage, you should be aware that it is probable that someone wanting to acquire your property in the future might well do, so in the event that they can't get a mortgage, then the market price of the property could be adversely impacted. In the last decade the majority of banks and building societies have increased the required minimum lease length that they are prepared to lend on

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.
Barclays plc Mortgage term plus 25 years provided that leases of less than 85 years are be referred to us for approval.
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.
Halifax Minimum 70 years from the date of the mortgage.
Nationwide Building Society - Our minimum unexpired lease term is 55 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to every 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.

Get in touch with one of our Heckmondwike lease extension solicitors or enfranchisement solicitors

Lease extensions in Heckmondwike can be a difficult process. We recommend you secure professional help from a conveyancer and valuer with experience in this area.

We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Heckmondwike lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Heckmondwike Lease Extension Case Studies:

Mollie, Heckmondwike, West Yorkshire,

After protracted negotiations with the landlord of her basement apartment in Heckmondwike, Mollie initiated the lease extension process as the eighty year deadline was fast coming. The lease extension completed in February 2008. The freeholder’s fees were kept to an absolute minimum.

Heckmondwike case:

In 2013 we were phoned by Mr and Mrs. J Clark who, having owned a basement apartment in Heckmondwike in June 2003. We are asked if we could estimate the price could be for a ninety year extension to my lease. Comparative residencies in Heckmondwike with 100 year plus lease were valued about £257,800. The average ground rent payable was £65 invoiced yearly. The lease terminated in 2086. Taking into account 65 years unexpired we calculated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 exclusive of legals.

Heckmondwike case:

Last Autumn we were called by Mr and Mrs. T Hill , who acquired a garden flat in Heckmondwike in September 2001. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Heckmondwike with 100 year plus lease were valued about £196,400. The mid-range ground rent payable was £55 collected quarterly. The lease finished in 2075. Considering the 54 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £34,200 and £39,600 exclusive of expenses.