The value of Walkden leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the unexpired lease term is below than 80 years
It is generally considered 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 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Walkden 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.
Eliot owned a high value flat in Walkden being sold with a lease of just over fifty eight years outstanding. Eliot on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Eliot to invoke his statutory right. Eliot obtained expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Mr and Mrs. H Edwards acquired a ground floor flat in Walkden in September 2012. We are asked if we could estimate the price could be for a ninety year extension to my lease. Comparable residencies in Walkden with a long lease were in the region of £227,800. The average ground rent payable was £45 invoiced annually. The lease concluded on 19 August 2090. Considering the 65 years left we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including professional charges.
Dr Millie Rodríguez completed a first floor apartment in Walkden in November 1999. The question was if we could estimate the price would be for a 90 year lease extension. Similar premises in Walkden with 100 year plus lease were worth £270,000. The average amount of ground rent was £55 collected annually. The lease elapsed on 11 March 2101. Given that there were 76 years unexpired we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.