It’s an underpublicised certainty that a Leigh residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Leigh property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term falls below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Leigh will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Leigh with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 |
Lease extensions in Leigh can be a difficult process. We recommend you secure guidance from a conveyancing solicitor and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Leigh lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Edward, started to get near to the eighty-year mark with the lease on his leasehold apartment in Leigh. In buying his property twenty years previously, the length of the lease was of little significance. Luckily, he noticed he would imminently be paying way over the odds for a lease extension. Edward extended the lease just under the wire in March. Edward and the landlord who owned the flat above ultimately agreed on the final figure of £5,500 . If he not met the deadline, the amount would have increased by a minimum £1,125.
Last February we were approach by Dr T Clark , who acquired a studio apartment in Leigh in June 1996. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparable residencies in Leigh with an extended lease were worth £205,000. The mid-range amount of ground rent was £50 billed per annum. The lease ran out on 24 September 2104. Taking into account 79 years unexpired we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.
Last Summer we were called by Dr Amy Stewart , who bought a basement flat in Leigh in May 2004. The question was if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Similar flats in Leigh with an extended lease were valued about £275,000. The average ground rent payable was £65 collected every twelve months. The lease ran out on 5 October 2093. Taking into account 68 years remaining we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus expenses.