Heysham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Heysham tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Heysham you really ought to check if your lease has between 70 and ninety years left. There are good reasons why a Heysham flat owner with a lease having around eighty years remaining should take steps to ensure that a lease extension is effected without delay
Leasehold premises in Heysham with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Heysham 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 conveyancing solicitor we work with provide it.
Nathaniel owned a high value flat in Heysham on the market with a lease of just over fifty eight years remaining. Nathaniel on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Nathaniel to invoke his statutory right. Nathaniel procured expert advice and secured satisfactory resolution without resorting to tribunal and readily saleable.
Last October we were e-mailed by Mr and Mrs. C Lee , who was assigned a lease of a studio flat in Heysham in February 2009. We are asked if we could approximate the premium could be to prolong the lease by 90 years. Comparable properties in Heysham with a long lease were valued around £176,200. The average ground rent payable was £65 collected yearly. The lease ran out on 2 May 2082. Considering the 56 years outstanding we calculated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 plus expenses.
In 2010 we were approached by Dr F Rivera who, having was assigned a lease of a studio apartment in Heysham in March 1998. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by an additional years. Identical flats in Heysham with a long lease were worth £242,600. The average amount of ground rent was £45 collected quarterly. The lease ran out in 2093. Considering the 67 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 not including legals.