The market value of a leasehold property in Heywood depends on how long the lease has left to run. If it is near to or less than eighty years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. Ideally one should start the lease extension process when the lease still has 82 years remaining so that formalities can be finalised in advance of the 80 year threshold. Statute entitles Heywood qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Halifax | 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 also be not less than 75 years at the outset of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Heywood 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 conveyancer we work with provide it.
Ben was the the leasehold proprietor of a studio apartment in Heywood on the market with a lease of a few days over 72 years left. Ben informally contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Ben to invoke his statutory right. Ben obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2013 we were e-mailed by Ms Anna Reed who, having bought a studio flat in Heywood in February 2003. The dilemma was if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparable residencies in Heywood with 100 year plus lease were in the region of £235,200. The average ground rent payable was £45 invoiced monthly. The lease came to a finish on 1 June 2091. Given that there were 66 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus legals.
In 2012 we were phoned by Mrs I Simon who, having completed a one bedroom apartment in Heywood in January 1999. We are asked if we could approximate the price would likely be to extend the lease by 90 years. Identical homes in Heywood with an extended lease were worth £280,000. The average amount of ground rent was £55 collected per annum. The lease expired in 2102. Having 77 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 not including legals.