With a residential leasehold property in Littleborough, you are actually buying an entitlement to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are fewer than 80 years left. Leasehold owners in Littleborough with a lease drawing near to 81 years left should seriously consider extending it sooner as opposed to later. When a lease has below 80 years outstanding, under the relevant legislation the freeholder can calculate and levy a greater premium, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold premises in Littleborough with more than 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 undertake 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.
Rory was the the leasehold proprietor of a high value flat in Littleborough being marketed with a lease of a little over sixty years remaining. Rory informally approached his freeholder being a well known London-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Rory to invoke his statutory right. Rory procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
Last Winter we were contacted by Dr Jake Mitchell , who completed a one bedroom flat in Littleborough in October 2008. The dilemma was if we could approximate the premium could be to prolong the lease by a further 90 years. Identical flats in Littleborough with a long lease were valued about £250,000. The mid-range amount of ground rent was £50 invoiced annually. The lease concluded on 17 April 2093. Having 68 years left we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including expenses.
In 2010 we were called by Mrs T Collins who, having bought a basement flat in Littleborough in August 2011. The question was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Identical flats in Littleborough with an extended lease were worth £285,000. The mid-range ground rent payable was £55 collected yearly. The lease ran out on 26 July 2104. Given that there were 79 years unexpired we approximated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of professional charges.