Leigh leases on domestic deteriorating in value. if your lease has in the region of 90 years remaining, you should start thinking about a lease extension. If lease term dips under 80 years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Leigh will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm if you qualify. In certain circumstances you may not be entitled. There are prescribed timetables and steps to follow once the process is triggered so it’s best to be guided by a conveyancer during the process.
Leasehold properties in Leigh with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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 Leigh leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Michael, came seriously close to the 80-year threshold with the lease on his ground floor flat in Leigh. In buying his flat two decades ago, the unexpired term was of no bearing. Thankfully, he noticed he would imminently be paying an escalated premium for Extending the lease. Michael arranged for a lease extension just under the wire last July. Michael and the landlord in the end agreed on sum of £5,500 . If he had missed the deadline, the sum would have escalated by at least £1,050.
In 2010 we were contacted by Mr and Mrs. A Evans who, having owned a first floor flat in Leigh in July 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Identical properties in Leigh with an extended lease were worth £184,000. The mid-range ground rent payable was £55 invoiced monthly. The lease terminated in 2077. Considering the 53 years left we approximated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 exclusive of expenses.
In 2011 we were phoned by Ms Emily Smith who, having was assigned a lease of a one bedroom flat in Leigh in May 1995. The dilemma was if we could approximate the premium could be to prolong the lease by an additional years. Comparative properties in Leigh with a long lease were valued around £290,000. The average ground rent payable was £45 invoiced annually. The lease lapsed on 27 May 2097. Considering the 73 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.