The re-sale value of a leasehold property in South Woodham Ferrers depends on how long the lease has left to run. If it is near to or less than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. Ideally one should start the lease extension process when a lease still has 82 years to run so that all matters can be addressed in advance of the 80 year threshold. Current legislation entitles South Woodham Ferrers qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| Chelsea Building Society | 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. |
| Halifax | 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 also be not less than 75 years at the outset of the mortgage. |
| Yorkshire Building Society | 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. |
The conveyancing solicitors that we work with handle South Woodham Ferrers 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.
Trailing unsuccessful correspondence with the landlord of her studio apartment in South Woodham Ferrers, Jessica started the lease extension process just as the lease was nearing the crucial eighty-year threshold. The transaction was finalised in July 2009. The freeholder’s fees were kept to an absolute minimum.
Mrs Victoria Wood owned a ground floor flat in South Woodham Ferrers in January 2010. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by ninety years. Identical residencies in South Woodham Ferrers with an extended lease were in the region of £242,600. The mid-range amount of ground rent was £45 billed annually. The lease finished in 2092. Having 67 years remaining we approximated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 not including costs.
Mr Mason Hill bought a first floor apartment in South Woodham Ferrers in September 1999. The question was if we could approximate the premium would likely be to extend the lease by 90 years. Identical properties in South Woodham Ferrers with an extended lease were valued about £280,000. The mid-range amount of ground rent was £55 collected quarterly. The lease expired in 2103. Having 78 years remaining we estimated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of professional charges.