Leigh leases on residential properties are gradually losing value. Where your lease has approximately ninety years left, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for the lease extension to take place before the term of the existing lease drops lower than 80 years - otherwise a higher amount will be due. Flat owners in Leigh will mostly qualify for a lease extension; however it’s a good idea to check with a lawyer to confirm if you qualify. In some circumstances you may not be entitled. There are also strict deadlines and formalities to comply with once the process has started so it’s best to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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 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 lawyer we work with provide it.
Last Winter Jasper, started to get close to the eighty-year mark with the lease on his ground floor flat in Leigh. In buying his flat two decades ago, the length of the lease was of no importance. Thankfully, he noticed he would imminently be paying an inflated amount for Extending the lease. Jasper extended the lease just in the nick of time in August. Jasper and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If the lease had slid to less than 80 years, the premium would have escalated by at least £950.
In 2011 we were e-mailed by Mr and Mrs. Y Gómez who, having purchased a studio flat in Leigh in April 2004. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Comparative premises in Leigh with a long lease were in the region of £198,800. The average ground rent payable was £55 billed quarterly. The lease came to a finish on 1 October 2081. Taking into account 55 years outstanding we calculated the premium to the freeholder for the lease extension to be within £33,300 and £38,400 not including professional charges.
Last month we were e-mailed by Dr H Cox , who owned a newly refurbished apartment in Leigh in September 2011. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical homes in Leigh with 100 year plus lease were valued around £295,000. The average amount of ground rent was £50 invoiced every twelve months. The lease ran out in 2101. Given that there were 75 years left we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of legals.