Littleborough leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Littleborough enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Littleborough you really ought to check if your lease has between 70 and ninety years left. There are compelling reasons why a Littleborough flat owner with a lease having around 80 years unexpired should take steps to ensure that a lease extension is actioned without delay
Leasehold properties in Littleborough with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Littleborough 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.
During the course of the last few months Edward, came dangerously close to the 80-year mark with the lease on his studio apartment in Littleborough. Having purchased his property two decades ago, the length of the lease was of minimal relevance. As luck would have it, it dawned on him that he would soon be paying an inflated amount for a lease extension. Edward was able to extend his lease at the eleventh hour in July. Edward and the landlord ultimately agreed on an amount of £6,000 . If the lease had gone to less than 80 years, the price would have increased by a minimum £1,050.
In 2012 we were e-mailed by Mr R Carter who, having acquired a garden flat in Littleborough in February 2009. We are asked if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Identical properties in Littleborough with an extended lease were valued around £166,400. The mid-range amount of ground rent was £60 billed quarterly. The lease lapsed in 2080. Considering the 54 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 not including expenses.
In 2010 we were e-mailed by Mr and Mrs. C Miller who, having bought a purpose-built apartment in Littleborough in October 2000. The dilemma was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Comparable premises in Littleborough with an extended lease were worth £227,800. The average ground rent payable was £45 invoiced monthly. The lease elapsed on 19 April 2091. Considering the 65 years remaining we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including fees.