Wigan leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Wigan residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Wigan you really ought to see if your lease has between seventy and ninety years left. There are good reasons why a Wigan leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is effected without delay
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Wigan,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Wigan valuers.
Last October Theo, started to get near to the 80-year threshold with the lease on his first floor flat in Wigan. In buying his home two decades ago, the unexpired term was of no relevance. As luck would have it, he noticed he would imminently be paying an inflated amount for a lease extension. Theo extended the lease just in the nick of time in March. Theo and the landlord subsequently agreed on sum of £5,000 . If he had missed the deadline, the figure would have gone up by at least £1,000.
In 2010 we were called by Mr and Mrs. B Flores who, having bought a ground floor flat in Wigan in November 2004. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar properties in Wigan with 100 year plus lease were valued about £256,600. The mid-range amount of ground rent was £60 billed quarterly. The lease finished on 19 June 2078. Having 52 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £41,800 and £48,400 not including fees.
Dr Bethan Hernández acquired a studio flat in Wigan in May 1999. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Comparative premises in Wigan with 100 year plus lease were valued around £218,000. The average amount of ground rent was £45 billed quarterly. The lease terminated on 10 September 2089. Having 63 years outstanding we calculated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 not including legals.