The market value of a leasehold property in Wigan depends on how long the lease has remaining. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. It is preferable to commence the lease extension process when the lease still has 82 years unexpired so that a lease extension can be addressed in advance of the 80 year mark. Current legislation entitles Wigan qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Wigan with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Engaging our service gives you better control over the value of your Wigan leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Archie was the the leasehold owner of a studio apartment in Wigan on the market with a lease of a little over 72 years outstanding. Archie on an informal basis spoke with his landlord being a well known local-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Archie to invoke his statutory right. Archie procured expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
In 2009 we were contacted by Mr Benjamin Howard who, having owned a purpose-built flat in Wigan in August 2004. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar residencies in Wigan with 100 year plus lease were valued about £168,800. The mid-range amount of ground rent was £60 invoiced annually. The lease finished on 28 October 2080. Given that there were 55 years as a residual term we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 not including costs.
Last Spring we were called by Mr and Mrs. J Morel , who was assigned a lease of a studio apartment in Wigan in October 2001. The question was if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by ninety years. Identical properties in Wigan with 100 year plus lease were valued around £235,200. The mid-range ground rent payable was £45 invoiced quarterly. The lease expired in 2091. Considering the 66 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.