It’s an underpublicised truth that a Westhoughton residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Westhoughton property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Westhoughton will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold residencies in Westhoughton with over 100 years outstanding on the lease are sometimes regarded as a ‘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 upside in buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide 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 decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last October Gabriel, came precariously near to the eighty-year mark with the lease on his two bedroom apartment in Westhoughton. Having bought his flat twenty years ago, the length of the lease was of minimal relevance. Fortunately, he recognised he would imminently be paying an inflated amount for Extending the lease. Gabriel arranged for a lease extension just under the wire in June. Gabriel and the freeholder via the managing agents in the end settled on sum of £5,500 . If he had missed the deadline, the amount would have escalated by a minimum £1,000.
Last Christmas we were called by Ms J Wright , who owned a ground floor flat in Westhoughton in February 2004. We are asked if we could estimate the price could be to prolong the lease by ninety years. Identical homes in Westhoughton with a long lease were in the region of £275,000. The mid-range ground rent payable was £55 invoiced annually. The lease finished on 17 May 2101. Taking into account 77 years unexpired we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of costs.
Last Christmas we were e-mailed by Dr Courtney Roux , who owned a basement apartment in Westhoughton in November 2008. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by a further 90 years. Comparative residencies in Westhoughton with a long lease were in the region of £183,600. The average ground rent payable was £65 invoiced monthly. The lease ran out on 13 January 2081. Given that there were 57 years remaining we approximated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 not including legals.