It’s an underpublicised certainty that a Walkington residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Walkington property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining drops under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Walkington will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, 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. |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you better control over the value of your Walkington leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kian owned a studio flat in Walkington on the market with a lease of a little over fifty eight years outstanding. Kian on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Kian to invoke his statutory right. Kian obtained expert advice and secured an acceptable resolution informally and readily saleable.
Ms S Bailey completed a one bedroom apartment in Walkington in September 2001. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Comparative flats in Walkington with 100 year plus lease were in the region of £171,800. The average ground rent payable was £55 collected annually. The lease concluded on 26 August 2075. Taking into account 50 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 not including professional charges.
In 2013 we were phoned by Dr L Rodríguez who, having took over the lease of a purpose-built flat in Walkington in March 2006. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Similar properties in Walkington with an extended lease were valued about £280,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease expiry date was in 2095. Having 70 years left we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of legals.