Leigh residential property held on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
Leasehold premises in Leigh with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake 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.
In the wake of eight months of unsuccessful negotiations with the freeholder of her garden apartment in Leigh, Eleanor started the lease extension process as the 80 year mark was rapidly advancing. The lease extension was concluded in July 2005. The landlord’s fees were kept to an absolute minimum.
In 2012 we were called by Dr P Michel who, having moved into a one bedroom flat in Leigh in November 2009. The dilemma was if we could estimate the premium would be to extend the lease by an additional years. Comparative flats in Leigh with 100 year plus lease were worth £295,000. The average ground rent payable was £50 invoiced annually. The lease expiry date was on 28 September 2101. Taking into account 75 years as a residual term we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including fees.
Mrs T Cox was assigned a lease of a garden apartment in Leigh in July 2001. The dilemma was if we could approximate the price would likely be to extend the lease by 90 years. Comparable residencies in Leigh with 100 year plus lease were valued about £250,400. The mid-range ground rent payable was £65 billed yearly. The lease expired in 2090. Taking into account 64 years outstanding we estimated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 exclusive of expenses.