It’s a harsh truth that a Littleborough residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Littleborough property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term drops under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Littleborough will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Irrespective of whether you are a tenant or a freeholder in Littleborough,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Littleborough valuers.
Trailing unsuccessful discussions with the freeholder of her first floor apartment in Littleborough, Emma initiated the lease extension process just as the lease was coming close to the critical 80-year mark. The legal work was finalised in June 2014. The landlord’s fees were kept to an absolute minimum.
In 2014 we were called by Dr Isabelle Bernard who, having moved into a first floor flat in Littleborough in October 2010. The question was if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Identical flats in Littleborough with an extended lease were valued around £235,200. The average ground rent payable was £45 billed every twelve months. The lease elapsed in 2092. Taking into account 66 years remaining we approximated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 plus costs.
Mr and Mrs. U Davies acquired a garden flat in Littleborough in March 1998. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year extension to my lease. Comparative flats in Littleborough with an extended lease were valued about £280,000. The mid-range ground rent payable was £55 billed monthly. The lease expired in 2103. Considering the 77 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of legals.