It’s a harsh certainty that a Westhoughton residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Westhoughton property prices.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be due. Most flat owners in Westhoughton will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service gives you enhanced control over the value of your Westhoughton leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Arthur, started to get near to the 80-year threshold with the lease on his basement apartment in Westhoughton. Having purchased his flat two decades ago, the length of the lease was of minimal interest. Fortunately, he recognised he would imminently be paying an escalated premium for Extending the lease. Arthur extended the lease just under the wire last March. Arthur and the landlord who owned the flat above ultimately agreed on a premium of £5,000 . If he not met the deadline, the premium would have become more costly by a minimum £900.
In 2013 we were approached by Mrs F Anderson who, having purchased a studio apartment in Westhoughton in November 1997. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Identical flats in Westhoughton with an extended lease were in the region of £183,600. The average ground rent payable was £65 invoiced every twelve months. The lease lapsed in 2083. Considering the 57 years left we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of expenses.
Mr and Mrs. H Green took over the lease of a recently refurbished flat in Westhoughton in February 1997. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Comparable properties in Westhoughton with 100 year plus lease were in the region of £245,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease expired in 2094. Having 68 years outstanding we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of fees.