It’s a harsh truth that a Heywood residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Heywood property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher amount will be payable. Most flat owners in Heywood will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in Heywood with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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. |
Engaging our service gives you increased control over the value of your Heywood leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Spring Sam, came dangerously near to the 80-year mark with the lease on his basement apartment in Heywood. Having purchased his home 19 years ago, the lease term was of minimal relevance. Thankfully, it dawned on him that he needed to take action soon on a lease extension. Sam was able to extend his lease just in the nick of time in September. Sam and the landlord who owned the flat above subsequently settled on sum of £5,000 . If the lease had slipped below eighty years, the sum would have escalated by at least £1,125.
In 2014 we were contacted by Mrs K Morel who, having bought a garden apartment in Heywood in February 2002. We are asked if we could estimate the premium could be for a ninety year lease extension. Identical homes in Heywood with an extended lease were valued about £210,600. The average ground rent payable was £45 invoiced monthly. The lease expired in 2087. Having 62 years remaining we estimated the premium to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of expenses.
Last Autumn we were called by Dr R Williams , who acquired a garden flat in Heywood in July 2012. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparative residencies in Heywood with an extended lease were in the region of £265,000. The average ground rent payable was £50 billed quarterly. The lease ran out on 7 August 2098. Having 73 years left we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including fees.