Chances are that where you own a flat in Leigh you actually own a long leasehold interest over your property
Leasehold premises in Leigh with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value 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 estate charges justify it.
| 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. |
| 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. |
The lawyers that we work with procure Leigh 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.
In recent months Benjamin, came dangerously close to the eighty-year mark with the lease on his two bedroom apartment in Leigh. Having purchased his home 19 years ago, the unexpired term was of little importance. As luck would have it, he became aware that he needed to take action soon on a lease extension. Benjamin extended the lease just under the wire in July. Benjamin and the landlord who owned the flat above subsequently agreed on a premium of £6,000 . If he failed to meet the deadline, the figure would have escalated by a minimum £1,075.
In 2014 we were contacted by Dr T Lewis who, having purchased a one bedroom apartment in Leigh in June 2006. We are asked if we could approximate the premium would be to extend the lease by 90 years. Similar residencies in Leigh with a long lease were worth £166,800. The average amount of ground rent was £50 invoiced every twelve months. The lease concluded in 2075. Given that there were 50 years unexpired we calculated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 plus expenses.
Last Spring we were contacted by Mr and Mrs. J Evans , who completed a newly refurbished flat in Leigh in July 1999. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by ninety years. Comparative flats in Leigh with an extended lease were worth £280,000. The mid-range ground rent payable was £45 invoiced yearly. The lease terminated on 26 February 2095. Given that there were 70 years left we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of legals.