For those whose Littleborough home is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension.
Leasehold properties in Littleborough with over one hundred years outstanding on the lease are often referred to as ‘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 buying the reversionary interest unless savings on ground rent and maintenance charges warrant 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 handle 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 conveyancer we work with provide it.
During the course of the last few months Alfie, started to get near to the eighty-year threshold with the lease on his leasehold apartment in Littleborough. In buying his flat 18 years ago, the length of the lease was of no concern. As luck would have it, he became aware that he would soon be paying an inflated amount for a lease extension. Alfie extended the lease just in the nick of time last April. Alfie and the landlord who owned the flat above subsequently agreed on sum of £5,000 . If the lease had fallen below eighty years, the figure would have escalated by at least £1,000.
In 2014 we were approached by Mr and Mrs. P Mitchell who, having took over the lease of a first floor apartment in Littleborough in May 1999. We are asked if we could approximate the price could be to extend the lease by 90 years. Comparable residencies in Littleborough with 100 year plus lease were worth £215,600. The mid-range ground rent payable was £45 collected quarterly. The lease elapsed in 2086. Given that there were 62 years left we approximated the compensation to the freeholder to extend the lease to be between £18,100 and £20,800 plus professional charges.
In 2014 we were approached by Ms J Sánchez who, having moved into a garden flat in Littleborough in July 1996. The dilemma was if we could estimate the price would likely be to prolong the lease by a further 90 years. Similar premises in Littleborough with 100 year plus lease were worth £265,000. The average amount of ground rent was £50 billed quarterly. The lease elapsed on 9 May 2097. Having 73 years remaining we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.