With a residential leasehold property in Widnes, you are in fact renting it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than 80 years remaining. Anyone in Widnes with a lease drawing near to 81 years left should seriously consider extending it sooner than later. Once the lease term has below eighty years remaining, under the current legislation the landlord is entitled to calculate and charge a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold properties in Widnes with more than 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 premises. In such situations there is often little upside in 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Widnes 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 conveyancing solicitor we work with provide it.
Stanley owned a conversion apartment in Widnes being marketed with a lease of a little over 61 years unexpired. Stanley informally contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Stanley to exercise his statutory right. Stanley procured expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
In 2009 we were called by Mr Connor James who, having took over the lease of a first floor flat in Widnes in November 2001. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Comparable homes in Widnes with a long lease were valued about £275,000. The average amount of ground rent was £55 billed quarterly. The lease came to a finish in 2101. Considering the 76 years as a residual term we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
Mr N Norbert owned a basement apartment in Widnes in August 2010. The question was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Similar flats in Widnes with an extended lease were valued around £176,200. The mid-range ground rent payable was £65 collected every twelve months. The lease lapsed in 2081. Considering the 56 years outstanding we approximated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 exclusive of legals.